Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Oral Answers to Questions — SCOTLAND.

GLASGOW POLICE (IRISH ENLISTMENTS).

Colonel Wedgwood: asked the Secretary of State for Scotland the number of Irish-born citizens now serving in the Glasgow Police Force; and are such still being enlisted?

The Secretary of State for Scotland (Mr. Colville): The numbers are 28 born in Eire and 32 born in Northern Ireland. Subject to suitability, it is open to the chief constable to continue such enlistment.

Colonel Wedgwood: Do I understand from the right hon. Gentleman that they are still enlisting constables into the Glasgow Police Force from Southern Ireland?

Mr. Colville: Yes, Sir. I said that both in Eire and in Northern Ireland enlistment is still open, subject to suitability.

Mr. Buchanan: Is the right hon. Gentleman aware that the Glasgow Members are capable of looking after Glasgow without help from the right hon. and gallant Gentleman and without these very offensive questions being put by the right hon. and gallant Gentleman?

Colonel Wedgwood: Before the right hon. Gentleman answers that question, may I ask him whether the Glasgow Members are capable of looking after the I.R.A.?

Mr. Buchanan: Is the right hon. Gentleman aware that we are capable of looking after Glasgow better than the right hon. and gallant Gentleman is of looking after Newcastle-under-Lyme?

Several hon. Members: rose—

Mr. Speaker: Mr. Stephen.

Mr. Logan: On a point of Order. From whatever direction in this House this kind of question comes, there are other people that must resent them, and on that account I want to know whether I cannot ask a supplementary question. This type of question is uncalled for.

Mr. Speaker: Supplementary questions are only to elucidate the answer which has been given.

HOUSING.

Mr. Stephen: asked the Secretary of State for Scotland how many houses are at present under construction by the housing departments of the Glasgow Corporation; how many were completed last year; and how many it is hoped to complete this year?

Mr. Colville: I am informed that the number of houses presently under construction by Glasgow Corporation is 3,430. The corporation completed 2,788 houses in 1938, and hope to complete 3,000 this year.

Mr. Stephen: asked the Secretary of State for Scotland how many applications were received from householders in the Dennistoun, Whitevale, and Mile End wards of the Camlachie Parliamentary Division of Glasgow, respectively, during each of the last five years, for suitable housing accommodation; how many of those applications were successful; and how many applicants at the present time are waiting for houses to be allocated to them?

Mr. Colville: I regret that the information asked for by the hon. Member is not available.

Mr. Stephen: Can the right hon. Gentleman say whether the applications for Glasgow have been suspended for three months, and also whether the Glasgow Corporation housing department have not got the addresses of those who make application?

Mr. Colville: I understand that the records are not kept in wards. A letter has been sent to the hon. Member giving such information as I have about the whole city in regard to these applications. As regards the first part of his supplementary question, I have no information about that, but I will inquire.

Mr. Kirkwood: asked the Secretary of State for Scotland whether his attention has been drawn to the deplorable housing conditions in Millburn Park, Alexandria, where people have been living for two years in wooden huts; whether he will consult with the local authorities concerned with a view to providing permanent homes for these people before next winter; and whether he is aware that there are six ex-service men and 20 Territorials amongst the people who are seeking decent homes?

Mr. Colville: The conditions at Millburn Park, Alexandria, have been brought to my notice, and I am making further inquiries into the position.

Mr. Kirkwood: In the event of the right hon. Gentleman finding that the conditions are as stated in the question, will he rectify them at the very earliest moment, because these ex-service men and 40 Volunteers who are anxious to fight for their country are living in dread of having to go through another winter, and they have nowhere to lay their heads?

Mr. Colville: I am making inquiries, and in consultation with the local authorities I will see what can be done.

Mr. Kennedy: asked the Secretary of State for Scotland whether his attention has been drawn to the serious shortage of houses in many of the urban districts of Scotland; whether he is aware that many working-class families now occupy highly-rented single-apartment houses as sub-tenants, with no security of tenure, and with no prospect of finding alternative accommodation when threatened with eviction; and whether any further action is to be taken to meet the shortage?

Mr. Gallacher: asked the Secretary of State for Scotland whether he has considered a communication from the Culross Town Council approving the resolutions passed by the Convention of Royal Burghs on subsidies for reconstruction, and for tenants other than those affected by the Overcrowding and Slum Clearance Acts; and in view of the wide demand and the urgent need for action in this connection, will he take the necessary steps to provide these subsidies?

Mr. Colville: I would refer to the statement which I made on the general housing position during the Debate on 4th July.

Mr. Kennedy: May I take it that there is agreement that there is no shortage of material or of labour in Scotland as far as housing is concerned, and if that be so, what is the reason for the delay in the construction of houses?

Mr. Colville: I could not make quite so broad a statement as that. In general, the position regarding material is pretty satisfactory, but there are some local difficulties as regards labour. I would add that I am receiving a deputation on the question of housing in Edinburgh on Friday.

Mr. Gallacher: Does the right hon. Gentleman recognise the really serious urgency of this question, and will he do everything in his power to get the necessary means from the Treasury to advance the building of houses on the lines suggested?

Mr. Colville: Yes, Sir, I do recognise the urgency, and I have already taken steps which provide better subsidies for the purpose.

Mr. Buchanan: Can the right hon. Gentleman say why munition factories like that at Bishopton can spring up in next to no time, but when it comes to the building of houses there seems to be some unknown delay?

Mr. Colville: The hon. Member knows the difficulties with regard to local authorities and that the matter is not completely in my hands, but that I must work largely with the local authorities. I am as anxious as he is to see progress made.

TEACHERS' SALARIES.

Mr. Stephen: asked the Secretary of State for Scotland whether he is aware that there are many non-graduate teachers in Scotland who have not been put on the graduate scale despite the fact that they have given many years of efficient service; and whether he will represent to the National Joint Council for the Revision of Salary Scales that the position of such teachers should have first consideration in their deliberations?

Mr. Colville: The reply to the first part of the question is in the affirmative. As regards the second part, I would refer the hon. Member to my reply to his question of 27th June, in which I indicated that I would be ready to consider carefully any recommendations concerning teachers'


salaries that the National Joint Council might desire to place before me. The question whether the council should give priority of consideration to any particular matter may, I think, be left to the discretion of the council itself.

Mr. Stephen: Does the right hon. Gentleman realise that among those teachers are some of the most efficient teachers in Scotland and that they have gone on for years suffering this penalty because circumstances have prevented them taking a degree, and will he not do something to get justice for them, in view of the long period of injustice which they have suffered?

Mr. Colville: I have indicated that I am open to receive representations from the council and will consider them carefully.

Mr. Stephen: Will the right hon. Gentleman not bring to the attention of the Advisory Committee the necessity for something being done at once for these teachers?

Mr. Colville: I think the council are well aware of the position, and I have no doubt the hon. Member's question will come to their notice.

POOR PERSONS REPRESENTATION COMMITTEE.

Mr. J. J. Davidson: asked the Secretary of State for Scotland whether difficulties exist with regard to the acceptance of the recommendations of the Poor Persons Representation (Scotland) Committee; if so, what are the nature of the difficulties; and what steps he is taking in the matter?

Mr. Colville: The recommendations of this committee have not yet met with such a measure of general acceptance as would justify the introduction of legislation.

Mr. Davidson: Is it not a fact that this committee made a recommendation in 1937 and that the Secretary of State has been considering that ever since, and can he not tell the House now what are the difficulties that prevent his coming to a decision?

Mr. Colville: I have indicated before to the hon. Member that one of the difficulties is that this matter is contentious and that there is a number of inerests involved. As I explained in my answer, I do not see such a general measure of acceptance of

the recommendation as would at present justify the introduction of legislation.

Mr. Davidson: Has the right hon. Gentleman taken any steps to bring the contending parties together with a view to settling the difference?

Mr. Colville: Yes. Discussions are in-fact proceeding.

Mr. Robert Gibson: Is this matter more contentious than that of Scottish marriages?

PENSIONS.

Mr. Davidson: asked the Secretary of State for Scotland whether he has received a report of the findings of the conference of local authorities held recently in Glasgow on the question of pensions; and, if so, has he any statement to make?

Mr. Colville: I have seen Press reports of a conference of representatives of Scottish public assistance authorities in Glasgow on 21st June, but the views of the conference have not been communicated to me.

LOBSTER FISHERY.

Mr. R. Gibson: asked the Secretary of State for Scotland what is the average price for lobsters received by lobster fishermen on the West of Scotland for the current year, and 1914, respectively; whether he is aware that their expenses and cost of living are about treble what they were in the pre-war period, with the result that they are unable to earn a livelihood; and what proposals he has to place this industry on a sound basis so as to secure an adequate livelihood to these fishermen?

Mr. Colville: The average price received by West Coast fishermen for their lobsters during the first five months of 1939 is, I am informed, approximately 1s. 8d., as compared with 10½d. for the whole of 1914. According to my information, the working expenses and the cost of living of the lobster fishermen have not risen to the extent stated in the question, and the fishermen, as a rule, continue to find the fishing remunerative. At the same time there is reason to believe that this industry may be capable of further development, and I am at present considering what steps can be taken for that purpose.

Mr. Gibson: Can the right hon. Gentleman say to what extent the cost of living has been raised, if not to the extent stated in the question?

Mr. Colville: I could not give the exact figure, but my information is that it is not so high as suggested by the hon. and learned Gentleman.

Mr. Henderson Stewart: Will my right hon. Friend remember that we catch lobsters on the East Coast of Scotland as well, and that we shall look for some share of the benefits?

GOVERNMENT BUILDINGS, EDINBURGH (ROYAL OPENING).

Mr. Mathers: asked the Secretary of State for Scotland whether he is in a position to make a statement regarding the formal opening of the new Government buildings in Edinburgh?

Mr. Allan Chapman: asked the Secretary of State for Scotland when the new Government offices in Edinburgh will be ready for occupation; whether any formal opening of this building is contemplated; and whether he can indicate the date?

Mr. Colville: It is hoped that the new Government building on the Calton Hill, Edinburgh, will be ready for occupation early in September. I am glad to be able to announce that His Majesty the King, accompanied by Her Majesty the Queen, has graciously agreed to open the building formally on the afternoon of Thursday, 12th October. With the King's approval, the new building will be known as St. Andrew's House.

PUBLIC HEALTH (COAL MINE REFUSE).

Mr. Mathers: asked the Seretary of State for Scotland what applications he has had from local authorities for action to be taken on the strength of the provisions in the Public Health (Coal Mine Refuse) (Scotland) Act; what attitude he has taken; and whether he has indicated his general policy in this connection to the local authorities?

Mr. Colville: No applications have so far been received by the Department of Health for Scotland from local authorities for consent to proceedings being taken by them under the provisions of this Act. I am issuing a circular to local authorities calling their attention to the passing of this Act.

LAND ACQUISITION, GREENOCK CORPORATION.

Mr. R. Gibson: asked the Secretary of State for Scotland whether he has given his sanction to the purchase by the Greenock Corporation of an area of ground extending to about 300 acres at Murdieston Farm; what part of the site is intended for use as a recreation park; for what purpose the remainder of this area is intended; what price has been agreed upon or paid for this land; and what was the rateable value previous to acquisition?

Mr. Colville: The corporation inform me that they recently purchased 76.5 acres of ground at Nether Murdieston for the purpose of safeguarding part of the burgh water supply. My sanction is not required to a purchase of this nature. The corporation are, I understand, considering whether the land could be made available for purposes of recreation, but have reached no decision. The price paid for the land was£8,000, and its rateable value before acquisition was £25.

Mr. Gibson: Is that agricultural land?

Mr. Colville: I understand so.

Oral Answers to Questions — COAL INDUSTRY.

EMERGENCY PROTECTIVE MEASURES.

Mr. W. Joseph Stewart: asked the Secretary for Mines whether he has had a conference with the mines inspectors, Northern group, with a view to introducing a scheme for the protection of mine shafts, down cast and up cast, situated on the Durham coast during air raids in the event of war; and, if not, is it his intention to do so at an early date?

The Secretary for Mines (Mr. Geoffrey Lloyd): My Department has conferred with all the Divisional Inspectors about air-raid precautions at collieries generally, but the responsibility for taking appropriate measures in this respect rests primarily with the mineowners. As regards precautions in respect of shafts, arrangements are being made for the Lord Privy Seal and myself to meet representatives of the Mining Association to urge upon them the need for carrying out fully the advice given in the A.R.P. memorandum issued to all colliery undertakings. I am sending the hon. Member a copy and would


refer him particularly to the first paragraph on page 12.

Mr. Stewart: Will the hon. Gentleman undertake to expedite any scheme which he has in mind with a view to providing a margin of safety for those engaged in and about those mines in case of emergency?

Mr. Lloyd: That is the purpose of the meeting between the Mining Association and the right hon. Gentleman.

Mr. Paling: Has any agreement been reached on the type of protection which is to be afforded?

Mr. Lloyd: We have been in consultation on that matter.

OUTPUT QUOTAS (SALE).

Mr. Gordon Macdonald: asked the Secretary for Mines whether, in order to dispel the suspicion prevalent in the mining districts, he will request the colliery companies to make public when selling output quotas which result in the closing of collieries, not only the quantity of coal involved in the transaction, but also the price at which the coal is sold?

Mr. Lloyd: Section 8 of the Coal Mines Act, 1930, precludes me from publishing such information even if obtained, except with the consent of the parties affected. I am unable, therefore, to give a general undertaking in regard to this matter, but in particular cases in which hon. Members are interested, I will be ready to consider whether I could ask the owners if they would be willing to publish the information.

Mr. Macdonald: Is the Minister aware that in many colliery districts where men are displaced there is some suspicion that those who have invested their money in the industry are not losing by the closing of the colliery, whereas hundreds of displaced men are suffering great anxiety?

COAL DUST, MECHANISED MINING.

Mr. James Griffiths: asked the Secretary for Mines, who are the members of the Departmental Committee appointed to investigate the suppression and collection of coal dust in mechanised mining; and whether it is intended that the committee shall, in the course of their investigations, visit the various coalfields

and investigate the actual conditions in the coal mines?

Mr. Lloyd: This committee consists of 10 members, under the chairmanship of Sir Henry Walker, formerly Chief Inspector of Mines, and I will send the hon. Member a copy of the announcement made on 25th May giving the full particulars. As regards the second part of the question, Sir Henry Walker has informed me that it is his intention to make a series of underground inspections.

COKE (IMPORTS).

Mr. Day: asked the Secretary for Mines particulars of the extent to which foreign coke has been imported into this country for the 12 months ended to the last convenient date; and have any special reasons been given to his Department as to why supplies of coke cannot be obtained in this country?

Mr. Lloyd: During the 12 months ended 31st May, 1939, no foreign coke was imported into the United Kingdom. The 3,387 tons shown in the official statistics as imported represent land sales from Eire to Northern Ireland, and a few small shipments of British coke from the Channel Islands.

Mr. Day: Have any consultations taken place recently with the industry to see whether imports of this fuel can be stopped?

Mr. Lloyd: As I said, there is no foreign coke coming in.

Mr. George Griffiths: If anybody wants to buy any coke will the hon. Gentleman tell them that there are 40,000 tons of coke on the floor at our place and that we would let them have it cheap?

ACCIDENTS.

Mr. Mainwaring: asked the Secretary for Mines the number of accidents that occurred amongst mine-workers in the South Wales coalfield, surface and underground, respectively, during the years 1937 and 1938, classifying the accidents as caused by falls, etc., and those affected in age groups 14 to 20 years and 20 to 30 years, etc.?

Mr. Lloyd: As the reply involves a number of figures, I will, with the hon. Member's permission, circulate the available information in the OFFICIAL REPORT.

Following is the information:

Number of Persons Killed and Injured (disabled for more than three days) by Accidents at Mines under the Coal Mines Act in South Wales and Monmouthshire during the years 1937 and 1938, classified by Age Groups and Cause of Accident.


Cause of Accident.
Numbers Killed and Injured.


1937.
1938.


Age Group.
Age Group.


Under 16 years of age.
16 and under18 years of age.
18 and under 20 years of age.
Total 14–20 years of age.
20 years of age and over.
Under 16 years of age.
16 and under 18 years of age.
18 and under 20years of age.
Total 14–20 years of age.
20 years of age and over.


Underground:












Explosions of Firedamp or Coal Dust.
1
1
—
2
15
—
1
1
2
5


Falls of Ground
552
865
640
2,057
10,074
459
719
628
1,806
9,110


Shaft Accidents
1
—
1
2
29
1
1
—
2
22


Haulage Accidents
92
195
157
444
4,124
131
248
225
604
4,697


Miscellaneous
388
666
539
1,593
7,198
341
556
429
1,326
6,015


Total Underground
1,034
1,727
1,337
4,098
21,440
932
1,525
1,283
3,740
19,849


Surface:












On Railways, Sidings or Tramways.
32
35
29
96
495
30
38
34
102
568


Other Accidents
100
126
62
288
1,110
105
124
77
306
1,153


Total on Surface
132
161
91
384
1,605
135
162
111
408
1,721


Grand Total
1,166
1,888
1,428
4,482
23,045
1,067
1,687
1,394
4,148
21,570

Number of Persons Killed and Injured per 1,000 Persons employed in South Wales and Monmouth-shire during the years 1937 and 1938, classified by Age Groups and Cause of Accident.


Cause of Accident.
Killed and Injured per 1,000 Persons employed.


Under 16 years of age.
16 and under 18 years of age.
18 and under 20 years of age.
Total 14–20 years of age.
20 years of age and over.


1937.
1938.
1937.
1938.
1937.
1938.
1937.
1938.
1937.
1938.


Underground:












Explosions of Firedamp or Coal Dust. 
0.2
—
0.1
0.1
—
0.1
0.1
0.1
0.2
0.1


Falls of Ground
128.9
107.7
115.4
106.5
101.5
90.9
113.8
100.8
105.9
96.0


Shaft Accidents
0.2
0.2
—.
0.1
0.1
—
0.1
0.1
0.3
0.2


Haulage Accidents
21.5
30.8
26.0
36.7
24.9
32.6
24.5
33.7
43.3
49.5


Miscellaneous
90.6
80.0
89.0
82.3
85.5
62.1
88.1
74.0
75.7
63.4


Total Underground
241.4
218.7
230.5
225.7
212.0
185.7
226.6
208.7
225.4
209.2


Surface
133.6
134.5
122.2
122.2
106.6
104.5
121.6
120.3
81.4
86.4


Grand Total
221.2
202.6
214.3 
208.8
199.4
174.9
211.0
194.6
200.7
187.9



Great Britain.


Total Killed and Injured:












Below ground
281
247
236
230
194
188
229.8
215.8
204
191


Above ground
105
102
101
94
78
75
96.5
91.2
59
58

The Average Number of Persons employed in South Wales and Monmouthshire in the various Age Group in the Year 1937 and 1938.


Year.
Under 16 years of age.
16 and under 18 years of age.
18 and under 20 years of age.
Total 14–20 years of age.
20 years of age and over.


Underground.
Surface.
Underground.
Surface.
Underground.
Surface.
Underground.
Surface.
Underground.
Surface.


1937
…
4,284
988
7,494
1,3I7
6,308
854
18,086
3,159
95,124
19,719


1938
…
4,262
1,004
6,754
1,326
6,907
1,062
17,923
3,392
94,877
19,024

Mr. R. J. Taylor: asked the Secretary for Mines the number of fatal and non-fatal accidents in the coalfields of Great Britain in the age groups as 14 to 16, 16 to 18, 18 to 21, and 21 onwards for the years 1927 to 1938?

Mr. Lloyd: As the reply involves a number of figures, I will, with the hon. Member's permission, circulate the available information in the Official Report.

Following is the information:

Number of person killed and injured for more than three days by accidents at mines in Great Britan under the Coal Mines Act, 1911 (expect Stratified Ironstone Mines of Cleveland Lincolnshrine and Northamptonshire) during the year 1927–1938, classified according to age


Year.
Under 16 years of age.
16 and under 18 years of age.
18 and under 20 years of age.
20 years of age and over.
All ages.


Killed.
Injured.
Killed.
Injured.
Killed.
Injured.
Killed.
Injured.
Killed.
Injured.


1927
…
…
37
7,613
51
11,142
45
11,826
988
142,030
1,121
172,611


1928
…
…
36
7,189
62
10,430
34
10,813
851
132,604
983
161,036


1929
…
…
42
8,336
46
10,554
40
10,927
937
145,154
1,065
174,971


1930
…
…
30
7,483
34
10,497
48
10,101
896
137,460
1,008
165,541


1931
…
…
27
5,580
34
9,548
31
8,546
764
11,340
856
141,014


1932
…
…
19
4,400
32
7,655
29
7,599
797
105,887
377
125,541


1933
…
…
20
4,085
31
6,729
36
7,634
728
103,688
315
122,136


1934
…
…
19
5,163
28
6,753
30
7,580
989
112,944
1,066
132,440


1935
…
…
30
6,024
28
7,000
29
7,002
762
113,259
349
133,285


1936
…
…
29
5,922
26
8,247
31
6,458
698
114,702
784
135,329


1937
…
…
28
5,729
38
8,895
27
6,220
758
119,107
351
139,951


1938
…
…
18
5,069
29
7,864
22
6,882
782
111,493
851
131,308

SILICOSIS, SOUTH WALES.

19. Mr. J. Griffiths: asked the Secretary for Mines into how many areas it is proposed to divide the Cardiff and Swansea inspectorate divisions under the proposed reorganised scheme; and whether, having regard to the incidence of silicosis in the South Wales coalfield, he proposes to appoint in this coalfield inspectors with special knowledge and experience to deal with measures for the prevention of this disease?

Mr. Taylor: Can the Minister say whether there has been an increase or a decrease?

Mr. Lloyd: The figures will show that.

Mr. Davidson: But cannot the Minister say now whether the figures indicate an increase or a decrease?

Mr. Lloyd: Perhaps the hon. Member will look at them. They are very complicated

Mr. Lloyd: Under the proposed scheme of reorganisation that part of the present Cardiff and Swansea divisions which includes the South Wales coalfield will be divided into three areas each forming one inspection district. The remaining part of the Cardiff division and five counties in the South-West of England will form a fourth district. With regard to the second part of the question, additions are being made to the specialist staff at headquarters both on the medical side and for dealing with the prevention and suppres-


sion of dangerous dusts. When these officers have started work I will consider whether it is desirable that they should be assisted by specialists stationed in particular areas.

Mr. Mainwaring: asked the Secretary for Mines the number of men certified in the South Wales coalfield to be suffering from silicosis during each of the years 1935 to date, indicating also how many of them were below 40 years of age?

Mr. Lloyd: As the answer involves tables of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:


Coalminers in South Wales certified under the Various Industries (Silicosis) Schemes, 1931 and 1934.


Year.
Number of disablement cases.
Number of disablement cases under 40 years of age at date of certification.


1935 
190
23


1936
285
50


1937
251
45


1938
388
73


1939* (to 31st Mar.).;
76
7


Note—In 43 cases the age at certification is not known.*


*Provisional figures.

In addition, the following figures show over the same period the number of new cases certified as deaths which had not previously been certified as disabled:

Year.
Number of new cases(death).
Number of such cases under 40 at date of certification.


1935
19
—


1936
18
—


1937
15
1


1938
13
1


1939* (to 31st Mar.).
2
—


Note—In five cases the age at certification is not known.*


*Provisional figures.

OIL-FROM-COAL PLANT.

Mr. Tinker: asked the Secretary for Mines whether, in the setting up of new works, there is a likelihood of an oil-from-coal plant being placed in Lanca-

shire where there are available sites and the full supply of fuel?

Mr. Lloyd: The question of the erection of oil-from-coal plants is a matter for commercial initiative; but I have no doubt that where the establishment of such plants is contemplated the points mentioned by the hon. Member in favour of Lancashire will not be overlooked.

Mr. Tinker: When there is a question of setting up plants like this will there be an examination of various suitable sites round about these localities, and will consideration be given to them?

Mr. Lloyd: Yes, Sir.

Oral Answers to Questions — CHEMICAL AND METALLURGICAL INDUSTRIES (ELECTRIC POWER).

Mr. Ellis Smith: asked the President of the Board of Trade, (1) whether he is aware that it is now possible to generate electric current at a cost which compares favourably with most water-power countries, and thus to introduce or expand many industries; and, seeing that with the latest developments all the electro-metallurgical and subsidiary chemical processes should be centralised around large-scale power plants, and in view of the urgent need to marshal the full resources of the country, will he indicate what action he proposes to take;
(2)whether he is aware of the need to develop the electro-metallurgical and electro-chemical industries; will he take action to deal with the problems involved in view of their basic national importance; and will such action be taken at once- having regard to the economic and other factors, the need to stimulate the de pressed coal mining areas and develop the electrolytic processes and the production of ferrosilicon, molybdenum, titanium, and ferrovanadium;
(3)whether he will arrange for an early meeting of the Imperial Economic Committee, the Electricity Commissioners, and the Import Duties Advisory Committee, in order to consider the need for immediate action in order to bring the country into the position it should be in view of recent developments in the electro-chemical industries with particular regard to our needs in calcium-carbide, ferroalloys, copper refining, and the production of


aluminium and magnesium, and, also, the need for several national modern steam-power plants, planned and erected and linked up on the same site, the production of by-products and synthetic-organic plants?

The President of the Board of Trade (Mr. Oliver Stanley): I am aware that recent developments in the production of electricity in this country have tended to reduce the advantage of water power over steam power, with the result that the advantage of the former for the production of various materials is diminishing. A wide range of materials is already produced in this country in the electric furnace or by electrolytic processes, and I understand that other projects are in contemplation. The interests concerned in this country are in close touch with new developments and are watching for opportunities of expansion and I shall, of course, welcome any well considered schemes for the creation of new enterprises.

Mr. Boothby: Will the right hon. Gentleman consider introducing the Caledonian Power Bill as a Government Measure and as a well-considered scheme?

Mr. Stanley: The hon. Member's question referred to the increasing advantages of coal as compared with water power.

Oral Answers to Questions — PETROLEUM (PRODUCTION) ACTS.

Mr. G. Macdonald: asked the Secretary for Mines what progress has been made as a result of the Petroleum (Production) Acts, 1934 and 1935; the number of licences issued, with the areas concerned; and whether any prospecting has resulted satisfactorily?

Mr. Lloyd: Since the issue towards the end of 1935 of the first licences under the Petroleum (Production) Act, 1934, the work of prospecting for oil in this country has been actively proceeding. A total of 98 prospecting licences has been issued, and 77 of these, covering an area of 11,800 square miles, are in force. In all, 16 deep test boreholes have been put down and three more are at present being drilled. In addition a great deal of geological and geophysical work has been carried out. As to the results of the prospecting, oil and natural gas have been encountered in

boreholes near Edinburgh, and natural gas in a borehole near Whitby. Recently oil has been encountered in a deep borehole at Eakring, Nottinghamshire, and also smaller quantities at a shallower depth near Formby, Lancashire. It is too early as yet to assess the full significance of these discoveries.

Mr. Logan: Has any gas been found at Newcastle-under-Lyme?

Oral Answers to Questions — EIRE POLICE FORCE (BRITISH RECRUITS).

The following Question stood upon the Order Paper in the name of Colonel WEDGWOOD:

25. To ask the Secretary of State for Dominion Affairs whether he will inquire how many men born in Great Britain have been enlisted and are now serving in the Eire Police Force?

Colonel Wedgwood: In putting this question, may I apologise to the hon. Member for the Scotland division (Mr. Logan) for daring to put it?

The Secretary of State for Dominion Affairs (Sir Thomas Inskip): No, Sir. Considerations similar to those explained by my right hon. Friend the Secretary of State for the Home Department in reply to the right hon. Gentleman on 6th July apply to the present request.

Mr. Logan: Is the right hon. Gentleman able to say whether any of those police-men have given service in His Majesty's Forces?

Sir T. Inskip: Not without notice.

Mr. Stephen: Can the Minister say whether there are any Newcastle-under-Lyme men serving in the Irish force?

Colonel Wedgwood: No, there is no reciprocity.

Oral Answers to Questions — SOUTH AFRICA (HIGH COMMISSION TERRITORIES).

Lieut.-Commander Fletcher: asked the Secretary of State for Dominion Affairs whether he will inform the Government of the Union of South Africa that transfer of the High Commission territories can only take place with the full acquiescence of the populations of the territories concerned?

Mr. Sorensen: asked the Secretary of State for Dominion Affairs whether he will give reassurances that if the High Commission territories are to be transferred it should only be effected with the full acquiescence of the populations of the territories concerned; and if he is aware that the announcement of this policy made a profound impression and gave satisfaction to the natives of all the territories?

Mr. Creech Jones: asked the Secretary of State for Dominion Affairs whether before any possible transfer of the High Commission Territories of South Africa takes place, the full acquiescence of the populations of territories concerned will be obtained?

Sir T. Inskip: The position of His Majesty's Government in the United Kingdom in this matter is set out in detail in Command Paper 4948, and I have nothing to add to it.

Lieut.-Commander Fletcher: Is it not the case that the Government spokesman in another place said that the acquiescence of the natives would be necessary before these territories could be transferred, and may I ask why acquiescence is now being whittled down to consultation with the natives? Which statement do the Government stand by—the acquiescence of the natives or consultations?

Sir T. Inskip: There has been no whittling down at all of the statement made in the Command Paper. If the hon. and gallant Member will read the passage on the first page I think he will see that it is perfectly clear.

Mr. Creech Jones: Will the right hon. Gentleman say whether the statement made in another place still stands, because the Under-Secretary, speaking on behalf of the Government, and speaking most carefully, used the word "acquiescence"?

Oral Answers to Questions — TRADE AND COMMERCE.

GREECE.

Sir Joseph Leech: asked the President of the Board of Trade whether he has completed his examination of the possibility of persuading British tobacco companies to increase their purchases of Greek tobacco in order to assist towards a general development of Anglo-Greek

trade; and what have been the replies of the British tobacco companies?

Mr. Stanley: This matter is still under consideration, and I am not yet in a position to make any statement.

Mr. Liddall: asked the President of the Board of Trade whether he is aware that Greece is refusing to grant import licences for British diesel oil-engines, while placing orders for similar engines with Germany; and whether he will make representations to Greece, with a view to assisting the manufacture of oil-engines at Lincoln?

Mr. Stanley: I regret to say that difficulties of the kind to which my hon. Friend refers affect a number of branches of our export trade to Greece. I am looking into the case of which he has been good enough to send me particulars, and will communicate with him.

Mr. Liddall: Would not many of the difficulties be overcome if our tobacco manufacturers took tobacco from Greece and blended a little Greek tobacco with the large amount that they get from America?

Mr. Stanley: I have already answered one question on that point. I hope that my hon. Friend will not forget that the tobacco manufacturers, at the instance of His Majesty's Government, have already taken steps to blend Rhodesian tobacco.

BULGARIA.

Sir J. Leech: asked the President of the Board of Trade whether he has notified suitable British firms of the national advantage which would accrue to us by an increase in the importation of fruit products, minerals and raw materials from Bulgaria; and whether he will invite the London Chamber of Commerce to call a meeting of its members for the purpose of stimulating interest in the importation into Britain of raw products from Bulgaria?

Mr. Stanley: His Majesty's Government are now discussing with the Bulgarian Government arrangements which it is hoped will produce some increase in our imports from Bulgaria and generally promote trade between the two countries. If and when these arrangements are concluded, it will be for Bulgarian exporters to take advantage of the unproved opportunities, and I think it may well be left to their initiative.

SHIPBUILDING (TANKERS).

Mr. R. Morgan: asked the President of the Board of Trade the amount of oil-tanker tonnage under construction in British shipyards in 1938; and what percentage this was of the total tonnage under construction in Great Britain in that year?

Mr. Stanley: As the answer involves a table of figures I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

Table showing the tonnage of tankers of 1,000 tons gross and over recorded in Lloyd's Register Shipbuilding Returns as under construction at certain dates in 1938 in Great Britain and Ireland and the proportion of such tonnage to the total tonnage of all vessels so recorded as under construction at the same dates.


Date.
Tankers of 1,000 tons gross and over under
construction.
Proportion to vessels of 100 tons. gross and over under construction.



Tons gross.
Per cent.


31st March, 1938
244,657
22


30th June, 1938
291,842
28


30th September, 1938.
228,913
26


31st December, 1938.
237,218
30

NEW INDUSTRIES, LANCASHIRE.

Mr. Tinker: asked the President of the Board of Trade how many new works have been established in Lancashire since January, 1938; the number of employés; and where the works are situated?

Mr. Stanley: As the answer involves a tabular statement I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

The following statement, which has been compiled from the particulars received in connection with the Survey of Industrial Development, shows the number of factories opened in the Lancashire area during the year 1938, and the employment provided in those factories as at 31st December, 1938. The survey takes account only of factories employing 25 or more workpeople.

District.
Number of factories.
Employment provided.


Liverpool and West Cheshire.
7
6,100


Warrington and St. Helens Districts.
5
750


Manchester and Salford
29
3,55


Ashton-under-Lyne District.
4
850


Bolton, Bury and Wigan Districts.
10
650


Oldham and Rochdale Districts.
4
200


Blackburn and Burnley Districts.
6
450


North Lanes., Westmorland and Cumberland Districts.
2
400


Total
67
12,950

RAYON FABRICS (IMPORTS).

Sir Cyril Entwistle: asked the President of the Board of Trade the amount, both in value and yardage, of the rayon tissues, in the loom state and in the bleached state, of foreign origin which during the years 1937 and 1938 and the first three months of 1939, entered the United Kingdom for process and subsequent re-exportation either duty free by arrangement or of imports for this purpose on which drawback is claimed; and whether he is aware that these fabrics after processing in England are being exported as British fabrics?

Mr. Stanley: I regret that statistics of the kind asked for in the first part of the question are not maintained and could not be compiled without disproportionate labour and expense. As regards the last part of the question, the courts alone are able to say whether the application of the description "British made" or "Made in England" to imported fabrics processed in this country is a false trade description within the meaning of the Merchandise Marks Act, 1887. I am, however, prepared to institute proceedings in any case in which there is sufficient evidence to suggest a false description, and the question of obtaining the necessary evidence through the operation of Section 13 of the Import Duties Act or of the drawback system is being considered.

Sir C. Entwistle: Arising out of the first part of that answer, may I ask my right hon. Friend whether he is aware that the Manchester Chamber of Commerce regard


the obtaining of this information as a matter of importance? As the data is in the hands of the Customs and Excise, and drawback has to be claimed within six months, would he consider whether it is possible to obtain the information?

Mr. Stanley: I have gone into the matter, and I can tell my hon. and learned Friend that I do not think the information could be obtained without a quite disproportionate amount of labour and expense. It seems to me that the more important part of my answer is the second part, which deals with the possibility of checking this practice by means of prosecution.

Sir Nairne Stewart Sandeman: Is my right hon. Friend thinking of going right through the Merchandise Marks Act with the idea of bringing in further legislation?

Mr. Stanley: It does not need any amendment whatever. It is a matter of getting sufficient evidence to prove that there has been a breach.

INTERNATIONAL SUGAR COUNCIL.

Mr. Thorne: asked the President of the Board of Trade the names of the countries that are affiliated to the International Sugar Council; and what is the British representation upon the council?

Mr. Stanley: With the hon. Member's permission, I will circulate in the Official Report a list of the countries which are members of the International Sugar Council. The United Kingdom delegation consists of Sir Hugh Elles, who has been appointed chairman of the council, and officials of the Board of Trade and the Colonial Office.

Mr. Thorne: I take it for granted that the right hon. Gentleman is keeping a sharp eye on what the International Sugar Council are doing?

Mr. Stanley: We have been in rather constant communication with them.

Following is the list:

The Governments of the following countries signed the International Sugar Agreement:

South Africa
Australia. 
Belgium.
Brazil.

United Kingdom.
China. 
Cuba.
Czecho-Slovakia. 
Dominica. 
France. 
Germany. 
Haiti.
Hungary. 
India.
Netherlands. 
Peru. 
Poland.
Portugal.
Union of Soviet Socialist Republics.
United States of America.
Philippines. 
†Yugoslavia.

* Owing to unsettled conditions in China, that country has not yet ratified the agreement.

† The legislation necessary for the ratification of the agreement by France has been completed, but the instrument of ratification has not yet been deposited.

‡ The agreement has not yet been ratified by Yugoslavia.

Colonel Arthur Evans: asked the President of the Board of Trade why raw sugar for prompt shipment to the United Kingdom is quoted at a premium of approximately 6d. per cwt. over the price of raw sugar for August shipment, and more than Is. per cwt. than the price for early September shipment, and an even greater premium for October-November shipments?

Mr. Stanley: There are, I think, two reasons for the premium on sugar for early shipment as compared with sugar for shipment from September onwards. In the first place, supplies for the remainder of the current quota year are at present, so far as can be estimated, somewhat below requirements. Secondly, requirements in the third year, which begins on 1st September next, are expected to be less than the basic quotas, while certain proposals which the International Sugar Council has made to deal with the position have not yet been approved by all the Governments concerned.

Colonel Evans: What country has withheld its approval of the present suggestions of the International Sugar Council; must not the effect of those premiums be that all manufacturers and users of sugar in this country will reduce their present stocks in order to avoid sub-


stantial loss; and what action are His Majesty's Government taking to avoid this reduction in raw sugar stocks?

Mr. Stanley: We have written formally to the International Sugar Council saying that we consider there is a shortage of sugar and asking them to take steps.

Mr. Thorne: Is there a possibility of getting 80,000 tons of sugar sent from Russia?

Mr. Stanley: That depends upon the Russian Government.

Mr. R. Gibson: Are those prices for Cuban or for West Indian sugar?

COKE (MOISTURE CONTENT).

Mr. Day: asked the President of the Board of Trade whether, seeing that the wilful damping of coke is an offence under some of the local laws, he will consider introducing legislation taking powers to amend the general law, in order to pre scribe a maximum moisture content for all coke offered for sale to the public?

Mr. Stanley: The suggestion made by the hon. Member will be borne in mind when any convenient opportunity arises for amending the law.

Mr. Day: Does not the right hon. Gentleman consider, as this is already an offence under some local laws, that it would be better to make the legislation general?

Mr. Stanley: It is for that reason that I am giving the matter consideration.

PROVIDENT CHECK TRADING, SCOTLAND.

Mr. Gallacher: asked the President of the Board of Trade whether he is aware of the growth of the provident check system of trading in Scotland; that poor people are persuaded to pay by in stalments 21s. for what are alleged to be checks valued at 20s.; that the shop- keepers supplying goods on these checks give goods to the value of 16s. 6d. and return to the promoters 2s. 6d. for each 20s. worth of checks received; and will he take steps to control and regulate this system of trading, which bears heavily on the poorest sections of our population, and to provide fairer treatment for them?

Mr. Stanley: I have not previously received any complaints about the operation

of this system. I shall, of course, be prepared to consider any details the hon. Member may care to give me, but, on my present information, I am not clear that any action is called for or possible.

Mr. Gallacher: Are not the details in the question sufficient to warrant an inquiry into the conduct of the organisations that are carrying on this practice?

Mr. Stanley: Apart from those details, I should want certain particulars as to the names, and some proof that in fact control and regulation are necessary.

Mr. Gallacher: Am I to understand that, if the right hon. Gentleman gets the names of the firms and proof that the statement in the question is correct, he will make inquiries into the matter?

Mr. Stanley: I will certainly see what action is called for if the hon. Gentleman will give me the names and, in particular, proof of the value of the goods which were supplied.

GREAT BRITAIN AND POLAND.

Mr. Arthur Henderson: asked the Prime Minister whether he can make a statement on Anglo-Polish negotiations for a financial and economic agreement?

The Under-Secretary of State for Foreign Affairs (Mr. Butler): The head of the Polish delegation returned to London on 10th July from a visit to Warsaw and discussions are now in progress.

Oral Answers to Questions — GAUMONT-BRITISH PICTURE CORPORATION, LIMITED.

Vice-Admiral Taylor: asked the President of the Board of Trade whether all the books and accounts which he desires to examine have been placed at the disposal of the inspector appointed by the Board of Trade to investigate the affairs of the Gaumont-British Picture Corporation, Limited; and whether the investigation is proceeding with all possible speed?

Mr. Stanley: Certain documents and accounts, for which the inspector has asked, have not yet been placed at his disposal, but I understand that the matter is under discussion between the inspector and the directors of the company. Mean-while, the investigation is proceeding,


though progress was interrupted for some weeks owing to the books being required for the company's annual audit.

Vice-Admiral Taylor: Have the books which have not been supplied to the inspectors been those relating to subsidiary companies?

Mr. Stanley: Yes, Sir, I understand that that is so, but discussion is going on, and I cannot say that inspection has been refused.

Mr. Stanley: I cannot pretend that the directors of the company have been as helpful to my inspectors as I expected them to be.

Mr. Bellenger: Has not the inspector power to insist?

Mr. Stanley: There are powers in the last instance to go to the court, and the court can determine what books the inspector is entitled to have.

Sir Reginald Clarry: Has the inspector been refused anything he was entitled to receive?

Mr. Stanley: I have already answered that question.

Oral Answers to Questions — BANK FOR INTERNATIONAL SETTLEMENTS.

Mr. Mander: asked the Chancellor of the Exchequer whether he will consider the advisability of approaching the German Government with reference to the position created by the different interpretations of the duties of director of the Bank for International Settlements in Great Britain and in Germany, with a view to seeing whether, as co-signatories of the agreement of 20th January, 1930, setting up the bank, a satisfactory arrangement for the future can be reached?

The Chancellor of the Exchequer (Sir John Simon): The position is governed by Article 31 of the Statutes of the Bank for International Settlements, which provide that no director shall be a member or an official of a Government, unless he is the Governor of a Central Bank.

The Statutes rest upon the Convention of 30th January, 1930, and could only be altered by agreement between all the signatory Governments. As I have already indicated, I do not think that any useful purpose would be served by approaching those Governments with a view to amending the Statutes.

Mr. Mander: Is the right hon. Gentleman satisfied with a situation which leaves the Chairman of the Bank for International Settlement directly under the orders of the German Government and leaves the British director completely independent to do exactly what he likes, and is it not proposed to take some action to remedy that situation?

Sir J. Simon: In any case, the hon. Gentleman's suggestion would not, I fear, remedy the present position.

Oral Answers to Questions — GREAT BRITAIN AND NORTHERN IRELAND (FINANCIAL RELATIONS).

Mr. Creech Jones: asked the Chancellor of the Exchequer what was the amount of the anticipated annual net contribution by the Government of Northern Ireland to the British Exchequer at the time that Government was established; and what net contribution was made to the British Exchequer by the Government of Northern Ireland for the financial year 1938–39, taking into account all direct and indirect grants, subsidies, and concessions, such as remission of land purchase annuities, or, alternatively, what was the net contribution by the British Exchequer for the period in question to the Government of Northern Ireland?

Sir J. Simon: The financial relations between the Government of Northern Ireland and the Government of the United Kingdom were laid down by Sections 20–36 of the Government of Ireland Act, 1920, and the Irish Free State (Consequential Provisions) Act, 1922, in particular paragraph 4 of Schedule I. I am not aware that any estimate was given of the net contribution by Northern Ireland. In reply to the second part of the question, the Joint Exchequer Board is not yet in a position to determine the final figures for 1938–39. The relevant figures provisionally fixed are as follows:


The imperial contribution to be made by Northern Ireland is £1,000,000. The amount of the land purchase annuities retained by the Northern Ireland Government under Section 26 of the Government of Ireland Act, 1920, is £655,600. The payment to Northern Ireland in respect of Unemployment Insurance is £1,787,000.

Oral Answers to Questions — OLD AGE PENSIONS.

Mr. W. Joseph Stewart: asked the Chancellor of the Exchequer whether he has considered the communication from the clerk to the Durham County Council calling his attention to the fact that the Durham County Public Assistance Committee paid to old age pensioners and their dependants the amount of £231,951 during the year ended 31st March, 1939; and what reply he has sent regarding the action he intends to take in the matter?

Sir J. Simon: The answer to the first part of the question is in the affirmative. As regards the latter part, the letter has been acknowledged, but no further reply has been sent, as my right hon. Friends the Minister of Health and the Financial Secretary have agreed to receive a deputation at an early date from the County Councils Association on the subject.

Mr. Stewart: Is it the right hon. Gentleman's intention to do anything for these aged people, or is he going to leave them chargeable to the local rates?

Sir J. Simon: The answer I gave was that a deputation is to be received.

Sir Percy Harris: Is it not a fact that the Prime Minister has definitely turned down any suggestion for the increase of old age pensions; and would it not be franker to say so clearly?

Mr. T. Smith: Is there any truth in the rumour that the Government intend to improve the old age pension position before the next General Election?

Mr. Lipson: asked the Chancellor of the Exchequer whether during the Parliamentary Recess he will arrange to visit some old age pensioners in their homes and see for himself the conditions under which these old people are living?

Sir J. Simon: I am not unacquainted with the conditions of life of these old

people. Special arrangements for this purpose are not necessary.

Mr. Lipson: Is the right hon. Gentleman aware that his answer will give very great dissatisfaction; and that the question I have put down has given rise to new hope; and will he give an assurance that the question of increased old age pensions is under his active consideration?

Hon. Members: Answer.

Mr. Tinker: May I make a special plea to the right hon. Gentleman that he should do something? He knows what is happening.

Oral Answers to Questions — NATIONAL SAVINGS.

Sir Herbert Williams: asked the Chancellor of the Exchequer whether he can furnish an estimate of the savings of the people through the medium of the various facilities for such thrift; and what has been the increase since the end of 1931?

Sir J. Simon: As the answer to the first part of the question contains a number of figures I will, with my hon. Friend's permission, circulate it in the Official Report. In reply to the second part, the total for 1931 was £2,365 millions; the latest available total is £3,386 millions, an increase of £1,020 millions, or approximately 43 per cent.

Sir H. Williams: Is not that result due to the fact that people have greater faith than they had in 1931?

Hon. Members: Which people?

Mr. Thorne: If I put a question down about the other side of the picture, will theright hon. Gentleman give the facts?

Hon. Members: What is the other side?

Mr. Gallacher: Would the right hon. Gentleman give us the figures of the increase in debt?

Mr. Davidson: How many people spent their savings buying a knighthood?

Following is the answer to the first part of the question:

The following are the main figures normally taken into account in calculations of the nature suggested in the question. There are sometimes added life assurance and an allowance for the equity value of the borrower's interest in property financed by building societies


but these are not included in the figures below. It should be noted that:

(a) It is not practicable to frame an estimate of the extent to which these aggregate savings are attibutable to the small saver; the proportion varies in each case.
(b) As far as possible duplication has been eliminated but there still remains a comparatively small amount which cannot be definitely ascertained.

—
1931.£million
Latest available figures.


Date.
£millions.


National Savings Movement:





* National Savings Certificates
502.4
31st May, 1939
518.6


* Post Office Savings Ban
289.4
31st May, 1939
530.6


* Trustee Savings Banks
141.6
31st May, 1939
245.7


Post Office and Trustee Savings Bank Stock Register (nominal amount).
232.9 
31st May, 1939
207.1



1166.3

1502.0


Birmingham Municipal Ban
12.9
31st March, 1938
26.7


Building Societies (Share Capital, Deposits, etc.)
412.2
31st December, 1938
745.5


Industrial and Provident Societies
174.2
31st December, 1937
281.5


Industrial Assurance
280.2
31st December, 1937
417.2


Societies registered under the Friendly Societies Acts-
119.8
31st December, 1937
153.6


Accumulated Funds under the National Health Insurance Acts
127.9
31st December, 1937
138.1


Superannuation and other Trust Funds
42.8
31st December, 1937
75.9


Trade Unions
11.5
31st December, 1937
18.5


Railway Savings Bank
17.2
31st December, 1937
27.5


Total
2365.0

3386.5


* Includes estimated accrued interest.

Oral Answers to Questions — DEPRESSED AREAS (NEW INDUSTRIES).

Mr. A. Jenkins: asked the Chancellor of the Exchequer whether the Government propose to carry through the promised legislation this Session for the purpose of promoting the establishment of industries in areas that are depressed but not within the scheduled areas?

Sir J. Simon: The Bill is in course of preparation, and I hope it may be possible to introduce it before the House rises for the summer recess. It is impossible for me at this stage to give any guarantee as to its subsequent progress.

Mr. Jenkins: Does the right hon. Gentleman realise that definite pledges were given to the House and to the country that legislation would be introduced and carried through this Session?

(c)In certain cases the figures include sums which are in the nature of reserves.

(d) It is not possible to estimate the amount of Government stock held by the small investor otherwise than on the Post Office and Trustee Savings Banks registers (if figures were available it is to be presumed that they would show a decrease after 1931 corresponding to the decrease on the Post Office and Trustee Savings Banks registers).

Sir J. Simon: If there is general agreement I hope that it will be possible to carry the Measure before the end of the Session.

Oral Answers to Questions — BANK OF DANZIG.

Mr. G. Strauss: asked the Chancellor of the Exchequer whether, in view of the default of the Bank of Danzig, he will protect the interests of British creditors by taking action similar to the Czecho-Slovakia (Restriction of Banking Accounts, etc.) Bill?

Sir J. Simon: The answer is in the negative. The two cases referred to are not comparable.

Mr. Strauss: Is the Chancellor aware that the effect of the default of the Bank of Danzig is that the bank's considerable resources will not be available for foreign


creditors, but will be used for a different purpose?

Sir J. Simon: I think it will be quite plain to the hon. Gentleman that the two cases are not in the least comparable.

Mr. Strauss: Is the Chancellor in a position to ascertain from the Bank of England whether that bank holds any of the deposits or assets of the Bank of Danzig?

Oral Answers to Questions — CZECH ASSETS.

Mr. G. Strauss: asked the Chancellor of the Exchequer (1) whether the £6,750,000 unused balance of the Treasury's contribution to the Czechoslovak Government is included in the £16,000,000 blocked Czech gold and cash;
(2) whether he can further specify the composition of the £16,000,000 of blocked Czech gold and cash; in particular, how much of this was part of the Czechoslovak National Bank's gold reserve and foreign exchange reserve; how much was deposited by other Czech banks; and how much by corporations and individuals?

Sir J. Simon: The answer to question No. 51 is in the affirmative. I am not in a position to give further details of the composition of blocked Czech assets, since the Czecho-Slovakia (Restriction on Banking Accounts, etc.) Act does not give the Treasury power to obtain detailed information as to the individual accounts and assets subject to restriction.

Mr. Strauss: Can the Chancellor give an assurance that the deposits and assets owned by private firms and individuals will not be disclosed to the German authorities in any negotiations that may take place?

Sir J. Simon: I think it may be assumed that we shall not do anything to the injury of individuals.

Mr. Boothby: Is it not the case that the Czech assets referred to in question No. 52 can only be held here by and with the permission and knowledge of the State Bank of Czecho-Slovakia?

Oral Answers to Questions — CHINESE CURRENCY.

Mr. Bellenger: asked the Chancellor of the Exchequer whether, in view of the

determined attack on the Chinese dollar by the Japanese authorities, any further action is contemplated by His Majesty's Government towards maintaining the stability of the Chinese currency?

Sir J. Simon: No further action of the kind referred to in the question is under discussion at the present time.

Mr. Bellenger: In view of the danger to the Chinese currency owing to Japanese direct action, is the Chancellor confident that the Stabilisation Fund, or what is left of it, will be sufficient for the purpose of maintaining the stability of that currency?

Sir J. Simon: I think it is better not to discuss these questions. I understand it is the desire of the hon. Gentleman that the fund should be maintained, and he knows the efforts that the Government have made. I doubt very much whether such questions and answers across the House will really contribute to that.

Mr. Bellenger: I put my question in order to ascertain whether the Government are of the same intention as they were when the Bill was introduced. May I ask the right hon. Gentleman if he can give us that reassurance?

Sir J. Simon: I think the answer I originally gave dealt with the matter. I said that no further action of the kind is under discussion at the present time.

Mr. Gallacher: Has the right hon. Gentleman seen the article by Mr. Zilliacus in the "Tribune "?

Oral Answers to Questions — STATIONERY OFFICE (PRINTING CONTRACTS).

Mr. Davidson: asked the Financial Secretary to the Treasury the total cost of Government printing contracts for the year ended March, 1938, and the amount of such contracts allocated to Scottish printing firms?

The Financial Secretary to the Treasury (Captain Crookshank): The total expenditure from the Stationery Office Vote in respect of printing contracts for the year ended March, 1938, amounted to £1,208,666. Of this amount, £8,200 was in respect of contracts allocated to Scottish printing firms in that year, and £40,500 was in respect of running contract's allocated to such firms in previous years.

Mr. Davidson: Is the Financial Secretary aware that the printing industry in Scotland is showing increased unemployment figures; and will he carefully consider any representations that may be made to him that a sub-section of His Majesty's Stationery Office should be established in Scotland to deal with Scottish printing?

Captain Crookshank: I will certainly consider carefully any representations that may be made to me.

Sir H. Williams: In view of the principle involved in this question, will my right hon. and gallant Friend arrange with the First Lord of the Admiralty to transfer from the Clyde to the banks of the River Wandle, which rises in Croy-don, some of the naval shipbuilding contracts?

Oral Answers to Questions — SPECIAL AREAS RECONSTRUCTION ASSOCIATION (SOUTH WALES).

Mr. Jenkins: asked the Financial Secretary to the Treasury the total value of orders placed by the Government for the products of the factories built in South Wales and Monmouthshire by the Special Areas Reconstruction Association for the year 1938, and for the current year to the most recent date?

Captain Crookshank: As the hon. Member was informed on 19th June, factories are not provided by the Special Areas Reconstruction Association, Limited, and the question, therefore, does not appear to arise.

Oral Answers to Questions — COMPANIES ACT.

Mr. Bellenger: asked the President of the Board of Trade whether he has any proposals to make for the collation and examination of numerous suggested revisions of the Companies Act made by hon. Members in recent years; and whether any committee of inquiry is likely to be set up by His Majesty's Government in the near future?

Mr. Stanley: All suggestions for the amendment of the Companies Act, which have been made by hon. Members and others, have been carefully noted for consideration when the question of amending the law is under review. Having regard,

however, to the recent passage into law of the Prevention of Fraud (Investments) Act and the pressure of other urgent matters, I do not propose at present to set up a committee of inquiry.

Mr. Bellenger: Does the right hon. Gentleman recollect that on more than one occasion he has assured the House that a revision of the Companies Act is now overdue; and, as an inquiry would take some time, would it not be better, in the interests of future legislation, if that inquiry were set up forthwith?

Mr. Stanley: There is at the present moment so much extra urgent work, due to war emergency, falling on my Department, that I could not contemplate placing upon it the extra work which would be involved by an inquiry of this kind. I certainly recognise the need for a revision of the Companies Act when that is possible, but it must be when there can be some relaxation of the present war emergency efforts.

Oral Answers to Questions — BRITISH ARMY.

CAMPS.

Mr. Batey: asked the Secretary of State for War why some of the new Militia are being sent to Northern Ireland for training, seeing that there is abundance of vacant land at Tow Law, county Durham, and that the urban district council believe that a training camp would help their village in its long struggle with unemployment?

The Secretary of State for War (Mr. Hore-Belisha): Militiamen joining infantry regiments are sent, in the first instance, to their regimental depots, of which there are two in Northern Ireland.

Mr. Batey: asked the Secretary of State for War whether he is aware that the urban district council of Tow Law, county Durham, were desirous that a military camp should be held in their district this year as in former years; and why a camp will not be held, as this village has been hard hit by unemployment and has not received any benefit from the armaments expenditure?

Mr. Hore-Belisha: Tow Law is not included in the manoeuvre area where regular units will camp. The location of a Territorial camp at Tow Law was considered, but the preferences of Territorial


Army units have to be taken into account, and I regret that this area was not among those selected.

Mr. Batey: Has the Secretary for War ever been in that district? Will he go and see for himself?

Mr. Palmer: asked the Secretary of State for War what basis is adopted for calculating the rate of profit to the contractors who are constructing the Militia camp at Compton Down, Hampshire; and, in particular, whether he will state how the profit is related to labour and other costs?

Mr. Hore-Belisha: In addition to the net prime cost of the work, the contractor receives a lump sum fee for profit, overhead expenses and the use of certain tools. The lowest tender was accepted.

Mr. Palmer: Am I right in assuming that there is some incentive to economy on the part of the contractor?

Mr. Hore-Belisha: The main incentive here is speed.

Mr. Palmer: I am aware of that.

ARTILLERY.

Sir Annesley Somerville: asked the Secretary of State for War whether he can give an assurance that the regular field regiments of the Royal Artillery have their full complement of new 25-pounder guns; and when the Territorials will have an adequate supply?

Mr. Hore-Belisha: My hon. Friend will, perhaps, agree that it would be undesirable to publish detailed information on this subject.

TERRITORIALS (CLOTHING).

Mr. T. Smith: asked the Secretary of State for War whether he is aware that, according to a circular issued to recruits in the 44th H.C. Divisional Signals, the men have to provide their own boots, shirts and socks, only being allowed 2s. 6d. per annum as a boot allowance; and whether this is the general practice in the Territorial forces?

Mr. Hore-Belisha: The circular was evidently issued by the unit under a misapprehension, and has been cancelled. The unit has been supplied with shirts, socks and boots.

Mr. Smith: Does that mean that since the circular was sent out it has been cancelled, and that now the men will be supplied with boots, shirts and socks without having to find any money of their own; and, therefore, will the 2s. 6d. boot allowance not be paid?

Mr. Hore-Belisha: There are schemes by which boots may be bought by the men at a reduced price. There has been some confusion. This circular was sent out under a misapprehension, and it has been cancelled.

Mr. Wedgwood Benn: Was it cancelled after the question was put down?

Mr. Hore-Belisha: No, I think before the question was put down.

MILITIAMEN.

Mr. Kirkwood: asked the Secretary of State for War whether the regulations for allowances provide for an allowance being given to the invalid brother of a militiaman, who, before being called up, was helping to support him, and who is prepared to make an allotment of 6d.a day to his brother?

Mr. Hore-Belisha: The regulations will admit of an allowance being given in such a case, subject to the conditions indicated in the White Paper (Cmd. 6043), which was recently published.

Mr. Mander: asked the Secretary of State for War whether he will consider the advisability of giving an assurance to militiamen called up under the Military Training Act that they will at no time during their four years of service be asked to undertake duties in connection with an industrial dispute?

Mr. Hore-Belisha: The assurance in question covers the initial six months' period of training, subsequent to which militiamen will be in the same position as other Reservists or Territorials respectively.

Mr. Mander: Is it the case, then, that after the first six months all these militia-men are liable to be used in industrial disputes? Does the right hon. Gentleman think that that was the impression conveyed to the House by his speech in the Debate?

Mr. Hore-Belisha: What I said was:
I am prepared to give to each one of these militiamen a written statement, to say


that any liability he might be presumed to be under to be ordered by the military authorities to aid the civil authority in an industrial dispute during his period of continuous training would not be enforced in his case.
That statement was made and approved by the House.

Mr. Shinwell: Why should there be a discrimination between a man who serves his six months as a militiaman and the same man when he has terminated his training and becomes a member of the Territorial Forces?

Mr. Hore-Belisha: I think the hon. Member should be the last to put a question of that kind, because I made the concession in response to representations made to me by the trade unionists on that side of the House. Every citizen is under an obligation to aid the civil power.

Mr. Stephen: Does the period of continuous training, as provided for in the Act, not include the period in the Reserve?

Mr. Hore-Belisha: No, Sir.

Mr. Bellenger: asked the Secretary of State for War whether facilities are available for militiamen to attend evening institutes for the study of commercial subjects, similar to opportunities now existing in civil life whereby young men are enabled to study after the termination of their daily avocations?

Mr. Hore-Belisha: Any civil facilities of this kind which exist in the neighbourhood of Militia training camps and depots will be brought to the notice of militiamen, in order that they may take advantage of them in their spare time if they wish.

Mr. Edmund Harvey: Would the right hon. Gentleman consider issuing a leaflet, setting forth the educational opportunities which are to be provided?

Mr. Hore-Belisha: I have said that we shall draw the attention of militiamen to this service. I do not want to inundate them with leaflets.

BORDON CAMP (CONDITIONS).

Mr. T. Smith: asked the Secretary of State for War whether there has been any inquiry into the complaints already made regarding the conditions prevailing at

Bordon Camp; whether he is aware that the Reservists upon returning from a wet march have had no change from their wet shirts; that they have been under canvas during the recent wet weather although there are large vacant barracks adjacent; that complaints are being received from the Bridging Camp, Wyke Regis, with regard to insufficient food, badly served, and the wearing of wet clothes; and whether he intends to have exhaustive inquiries made into these grievances with a view to their rectification?

Mr. Hore-Belisha: Arrangements have been made for the issue of a third shirt to all Reservists, and for the issue of a second suit of uniform to all Reservists except those employed on sedentary duties. As regards vacant barracks, I think the hon. Member is referring to huts which are now being reconditioned, and are not at present ready for occupation. One of the units at Wyke Regis experienced some temporary difficulty in its messing arrangements, owing to the transfer from central messing to camp messing. If the hon. Member will bring to my notice any specific complaints not already dealt with, I shall be very glad to make inquiries.

Mr. Smith: Is the right hon. Gentleman aware that in addition to the statements contained in the question being correct, since the question appeared on the Order Paper men at Bordon Camp have been threatened with punishment if they made any complaints? Will he have an inquiry made at both these camps with regard to the conditions, and will he circulate in the OFFICIAL REPORT a specimen diet?

Mr. Hore-Belisha: I should be very reluctant to believe that any man was threatened with punishment because of a question put by the hon. Gentleman. If he can demonstrate to me that that is the case, I shall take proper steps in the matter. The Army diet sheet is well known, but if the hon. Gentleman wants particulars I shall be most ready to send them to him.

Mr. Smith: Will the right hon. Gentleman believe me when I say that this question was put down in all good faith, and was based on complaints by Reservists at the camp? When one gets 40 or 50 Reservists at the camp making a complaint, I think it is time there was an inquiry.

Mr. Hore-Belisha: I think I have shown responsiveness to the fact that the hon. Member's questions are put down in good faith by issuing an extra shirt to the Reservists.

BANK OF ENGLAND (MILITARY GUARD).

Mr. Day: asked the Secretary of State for War whether he will give the yearly cost to the State, for the three years ended to the last convenient date, of the regulation military guard supplied to the Bank of England; and whether any contribution towards this guard is made by the Bank?

Mr. Hore-Belisha: The only extra cost to the State is that involved in the use of regimental transport for the conveyance of kits and rations. This is assessed at about £80 a year. No payment for this service is made by the Bank to Army Funds, but the Bank provides the officer with dinner, and the other ranks with gratuities with which to buy refreshments.

Mr. Day: Has any similar application for protection been made by any of the other joint stock banks?

Mr. Hore-Belisha: No, Sir, they have not the same relations with the Government.

Captain Sir Derrick Gunston: Is it not a fact that the city of London very much appreciates this, as an evidence of the close co-operation between the city and the Government?

Mr. Hore-Belisha: Yes, and so do the Brigade of Guards.

CONTRACT, DURHAM (WORKING CONDITIONS).

Mr. Ritson: asked the Secretary of State for War whether he is aware that the contractors who are responsible for a large development under his Department, near Durham, are compelling men to work 80 hours per week while hundreds of men who have been unemployed for long periods cannot have their claims for work considered; whether these conditions are in accordance with the Fair Wages Clause, and what he proposes to do about it?

Mr. Hore-Belisha: I am informed that 62 hours a week is the maximum, and that the great majority of the men are working only three or four hours' overtime a week. The service is urgent, and

the number of men employed on the site is the most that can be employed without overcrowding. No pressure has been brought to bear on the men to work overtime, and I am advised that there is no departure from the Fair Wages Clause.

Mr. Ritson: Is the right hon. Gentleman aware that I have visited this place myself, and that every word in the question is corroborated by the men there? Is he aware, too, that deputations from the Legion and from trade union bodies have been to me again, and confirmed what I have stated in the question? Does he think that these conditions are fair, and will he blacklist the firm in respect of the next contract taken up? Further, is he aware that only vigorous young men are employed there, and that thousands are waiting to get in?

Mr. Hore-Belisha: There appears to be some difference of opinion. The hon. Member asked me whether these men are being compelled to work 80 hours per week, and I am informed that that is not the case. I am further informed by my right hon. Friend the Minister of Labour that the contractor has fully observed the clause in his contract relating to fair wages conditions.

Mr. Batey: The Minister says that these men are working 62 hours a week, and is that fair in a district where there are so many unemployed? There is no justification for men working 62 hours per week in Durham.

Mr. Hore-Belisha: I gave the reason for that; but, at any rate, 62 hours is very different from 80 hours.

Mr. Stephen: Will the right hon. Gentle man ask the Minister of Labour to make further inquiry in view of the statements of the right hon. Member?

Mr. Hore-Belisha: I have given an answer to the hon. Member that shows that his information is contested, and it would be the duty of the hon. Gentleman to provide me with some counteracting evidence. If he does so, of course, I will make inquiry and revise the information that I have received.

CAVALRY AND YEOMANRY REGIMENTS (HORSES).

Major Kellett: asked the Secretary of State for War whether it is intended to retain the horsed cavalry and yeomanry


regiments in case of war; and, if so, whether he is satisfied that an adequate supply of horses is available within the British Isles?

Mr. Hore-Belisha: The answer to both parts of the question is "Yes, Sir."

Mr. Turton: Will my right hon. Friend do what he can to prevent horses being bought by, and exported to, Germany?

Mr. Hore-Belisha: My right hon. Friend the President of the Board of Trade has stated that only 11 horses have been exported in five months.

Commander Sir Archibald Southby: How many were exported last year?

Oral Answers to Questions — BALLOON BARRAGE UNITS (COOKING ARRANGEMENTS).

Mr. Peat: asked the Secretary of State for War whether he is aware that the cooking arrangements for certain small and permanently manned posts of auxiliary units such as balloon barrage units are most unsatisfactory; and whether he will have this remedied without delay?

Mr. Hore-Belisha: A catering inspector has already been detailed to concentrate his attention on visiting these small anti-aircraft units, and he is engaged in giving them help and advice. Balloon barrage units are an Air Ministry responsibility.

Mr. Davidson: Will that inspector visit the Glasgow balloon barrage system to inspect the cooking facilities there, in view of the fact that they have at present only one balloon, and that that is on loan to London?

Mr. Hore-Belisha: I have said that the balloon barrage is not under the War Office, but under the Air Ministry.

Mr. Peat: Am I to understand that the inspector who has been detailed for this job will not visit these balloon barrage posts, because they are not under his jurisdiction?

Mr. Hore-Belisha: Yes, Sir. That is the position, but I have no doubt that adequate arrangements are made. It does not come under the War Office inspectorate.

Mr. Peat: If I put the same question to the Secretary of State for Air, shall I get an answer?

Oral Answers to Questions — COST-OF-LIVING INDEX.

Mr. G. Griffiths: asked the Minister of Labour the average cost-of-living index number for the year 1938 for rent, fuel and light, clothing, and miscellaneous articles?

The Minister of Labour (Mr. Ernest Brown): The averages of the percentage increases, over the level of July, 1914, recorded for the beginning of each of the 12 months of 1938 were as follows: rent (including rates), 60; fuel and light, 81; clothing, 109; miscellaneous items, 75.

Oral Answers to Questions — FOREIGN STUDENTS (PERMITS).

Mr. G. Macdonald: asked the Secretary of State for the Home Department the number of Austrian, Czecho- Slovakian and German students granted permits to stay in this country to take full-time courses at any college, giving separate figures for the Wigan Technical and Mining College; also, where the students are likely to proceed to on com pleting their course?

The Under-Secretary of State for the Home Department (Mr. Peake): No separate statistics are available of the number of students from the countries named. The general practice is to admit students from foreign countries on the understanding that they will leave when they have completed their studies, but as regards persons who if admitted here for study would not be able to return to their own countries on completion of their studies, they are in effect refugees and, as a general rule, are only admitted here if it appears that arrangements can ultimately be made for their emigration.

Mr. Macdonald: Can the Minister give the number of refugee students at the Wigan Technical and Mining College?

Mr. Peake: I have not been able to find out that information in the time available.

Oral Answers to Questions — NATIONAL HEALTH INSURANCE.

Mr. G. Griffiths: asked the Minister of Health the number of men and of women in Great Britain who were entitled


to benefits under the National Health Insurance Acts at the end of 1938?

The Parliamentary Secretary to the Minister of Health (Mr. Bernays): The number of men in Great Britain entitled to benefit under the National Health Insurance Act, 1936, on 31st December, 1938, was approximately 13,573,000 and the number of women was 6,704,000. In addition approximately 450,000 boys and 400,000 girls were entitled to medical benefit under the National Health Insurance (Juvenile Contributors and Young Persons) Act, 1937.

Mr. Griffiths: asked the Minister of Health the amount of the Treasury contribution to the National Health Insurance Scheme for the year 1938?

Mr. Bernays: The amount paid from the Exchequer towards the cost of National Health Insurance in Great Britain in the year ended 31st December, 1938, was £6,706,000. This figure does not include the cost of central administration of the scheme which was wholly borne by the Exchequer.

Mr. Griffiths: Can the hon. Gentleman state the cost of the central administration?

Mr. Bernays: Approximately£1,000,000.

Oral Answers to Questions — RATING AND VALUATION.

Mr. Sorensen: asked the Minister of Health whether he is aware that the Essex County Council passed a resolution at their meeting on 4th July that suitable legislation should be passed to secure for the local authorities, either directly or through the State, some portion of the enhanced values and revenues created in consequence of public enterprise and expenditure, so that the financial pressure on ratepayers may be alleviated; and whether, in view of the increasing demand for such legislation, he proposes to take any action?

Mr. Bernays: The reply to the first part of the question is in the affirmative. As regards the second part, I would refer the hon. Member to the reply given to the hon. Member for Tottenham, North (Mr. R. C. Morrison) on nth May.

Mr. Sorensen: Is the Parliamentary Secretary aware that something like 230

or 240 local authorities in the country have passed resolutions in favour of this principle, or have made applications to the Minister for powers along these lines; and, in view of that fact, will he propose to his right hon. Friend that something should be done to meet the demands of the authorities in this country?

Mr. Bernays: This question was very fully debated on a Private Member's Motion at the beginning of the year, and I have nothing to add to the statement which I then made on behalf of the Government on this question.

BUSINESS OF THE HOUSE.

Mr. Arthur Greenwood: May I ask the Prime Minister for what purpose it is proposed to suspend the n O'clock Rule to-day, and also whether he can state the business of the House for Friday?

The Prime Minister (Mr. Chamberlain): We hope by about half-past 10 o'clock to-night to have reached such a point in the consideration of the Finance Bill as will ensure the conclusion of the Report stage by half-past 7 to-morrow night. We shall then take to-night the Lords Amendments to the Ministry of Supply Bill.
On Friday the business will be the Second Reading of the Overseas Trade Guarantees Bill, and the Committee stage of the necessary Money Resolution; the Committee and remaining stages of the Air Ministry (Heston and Kenley Aerodromes Extension) Bill if not previously disposed of. If there is time, other Orders may be taken.

Mr. Greenwood: In view of the very late sitting last night and the natural desire of Members not to repeat that experience, which I tried to avoid yesterday, would it not be possible to terminate the discussion on the Finance Bill at an earlier hour and dispose of the Amendments to the Ministry of Supply Bill?

The Prime Minister: The important consideration, from my point of view, is that we should finish the Finance Bill by half-past 7 to-morrow night, and provided that that could be assured it might be possible to terminate discussion earlier to-night.

Mr. Greenwood: I should think there would not be any great difficulty in completing the programme announced last Thursday by 7.30 to-morrow night, in which case I should be grateful if the Prime Minister Would consent to the termination of the discussion a little earlier.

The Prime Minister: We will see what can be done.

Mr. Stephen: Was not the sitting until 3 o'clock this morning a breach of the promise which the Prime Minister gave yesterday that the House would not sit unduly late?

The Prime Minister: No, Sir. I did not give any such promise.

Mr. Stephen: Did not the right hon. Gentleman say:
We have a great deal of business to get through, but we do not want the House to

have to sit unduly late."—[OFFICIAL REPORT, 10th July, 1939; col. 1824, Vol. 349.]

The Prime Minister: I hope that the hon. Member appreciates what I said.

Mr. Stephen: Is the Prime Minister justified in making such a statement in view of what he said?

The Prime Minister: I thought I only expressed my hope.

Mr. Bellenger: Does not the Prime Minister recall that he assured the House that he is always reasonable, and is this some of his reasonableness?

Motion made, and Question put,
That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]

The House divided: Ayes, 250; Noes, 131.

Division No. 229.]
AYES.
[3.50 p.m.


Acland-Troyte, Lt.-Col. G. J.
Chapman, Sir S. (Edinburgh, S.)
Goldie, N. B.


Adams, S. V. T. (Leeds, W.)
Christie, J. A.
Graham, Captain A. C. (Wirral)


Albery, Sir Irving
Clarke, Colonel R. S. (E. Grinstead)
Grant-Ferris, Flight-Lieutenant R.


Allen, Col. J. Sandeman (B'knhead)
Clarry, sir Reginald
Grattan-Doyle, Sir N.


Anderson, Sir A. Garrett (C. of Ldn.)
Clydesdale, Marquess of
Gridley, Sir A. B.


Anderson, Rt. Hn. Sir J. (So'h Univ's)
Cobb, Captain E. C. (Preston)
Grigg, Sir E. W. M.


Anstruther-Gray, W. J.
Colfox, Major Sir W. P.
Grimston, R. V.


Aske, Sir R. W.
Colville, Rt. Hon. John
Gritten, W. G. Howard


Assheton, R.
Conant, Captain R. J. E.
Guinness, T. L. E. B.


Baillie, Sir A. W. M.
Cook, Sir T. R. A. M. (Norfolk, N.)
Gunston, Capt. Sir D. W.


Baldwin-Webb, Col. J
Cooks, J. D. (Hammersmith, s.)
Hacking, Rt. Hon. Sir D. H.


Balniel, Lord
Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)
Harbord, Sir A.


Barrie, Sir C. C.
Courthope, Col. Rt. Hon. Sir G. L.
Harvey, T. E. (Eng. Univ's.)


Beamish, Rear-Admiral T. P. H.
Croft, Brig.-Gen. Sir H. Page
Haslam, Henry (Horncastle)


Beauchamp, Sir B. C.
Crooke, Sir J. Smedley
Haslam, Sir J. (Bolton)


Beaumont, Hon. R. E. B. (Portsm'h)
Crookshank, Capt. Rt. Hon. H. F. C.
Hely-Hutchinson, M. R.


Beit, Sir A. L.
Crossley, A. C.
Heneage, Lieut.-Colonel A. P.


Bennett, Sir E. N.
Crowder, J. F. E.
Hepburn, P. G. T, Buchan-


Bernays, R, H.
Culverwell, C. T.
Hepworth, J.


Bird, Sir R. B.
Denman, Hon. R. D.
Higgs, W. F.


Blair, Sir R.
Denvillne Alfred
Holdsworth, H.


Boothby, R. J. G.
Doland, G. F.
Holmes, J. S.


Bossom, A. C.
Drewe, C.
Hore-Belisha, Rt. Hon. L


Boulton, W. W.
Dugdale, Captain T. L.
Howitt, Dr. A. B.


Boyce, H. Leslie
Duggan, H. J.
Hudson, Capt. A. U. M. (Hack., N.)


Bracken, B.
Duncan, J. A. L.
Hunloke, H. P.


Braithwaite, Major A. N. (Buckrose)
Eastwood, J. F.
Hunter, T.


Brass, Sir W.
Eckersley, P. T.
Inskip, Rt. Hon. Sir T. W. H.


Briscoe, Capt. R. G.
Eden, Rt. Hon. A.
Jarvis, Sir J. J.


Broadbridge, Sir G. T.
Edmondson, Major Sir J.
Jones, Sir H. Haydn (Merioneth)


Brocklebank, Sir Edmund
Elliot, Rt. Hon. W. E.
Jones, L. (Swansea W.)


Brooke, H. (Lewisham, W.)
Ellis, Sir G.
Keeling, E. H


Brown, Rt. Hon. E. (Leith)
Elliston, Capt. G. S.
Kellett, Major E. O.


Brown, Brig.-Gen. H. C. (Newbury)
Emmott, C. E. G. C.
Kerr, Colonel C.I. (Mantrose)


Browns, A. C. (Belfast, W.)
Emrys-Evans, P. V.
Kerr, H. W. (Oldham)


Bullock, Capt. M.
Entwistle, Sir C. F.
Keyes, Admiral of the Fleet Sir R.


Burgin, Rt. Hon. E. L.
Errington, E.
Kimball, L.


Burton, Col. H. W.
Erskine-Hill, A. G.
Lamb, Sir J. Q.


Butcher, H. W.
Evans, Colonel A. (Cardiff, S.)
Lancaster, Lieut.-Colonel C. G.


Butler, Rt. Hon. R. A.
Everard, Sir William Lindsay
Leech, Sir J. W.


Cartland, J. R. H.
Fildes, Sir H.
Lennox-Boyd, A. T. L.


Carver, Major W. H.
Findlay, Sir E.
Levy, T.


Cary, R. A.
Fleming, E. L.
Lewis, O.


Cayzer, Sir C. W. (City of Chester)
Fox, Sir G. W. G.
Liddall, W. S.


Cazalet, Thelma (Islington, E.)
Fremantle, Sir F. E.
Lipson, D. L.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Gilmour, Lt.-Col. Rt. Han. Sir J.
Lloyd, G. W.


Channon, H.
Gluckstein, L. H.
Locker-Lampson, Comdr, O. S.


Chapman, A. (Rutherglen)
Glyn, Major Sir R. G. C.
Loftus, P. C.




Mabane, W. (Huddersfield)
Plugge, Capt. L. F.
Stewart, J. Henderson (Fife, E.)


MacAndrew, Colonel Sir C. G.
Ponsonby, Col. C. E.
Stourton, Major Hon. J. J


McCorquodale, M. S.
Porritt, R. W.
Strickland, Captain W. F.


Macdonald, Capt. P. (Isle of Wight)
Pownall, Lt Col. Sir Assheton
Stuart, Hon. J. (Moray and Nairn)


McEwen, Capt. J. H. F.
Radford, E. A.
Sueter, Rear-Admiral Sir M. F.


McKie, J. H.
Ramsay, Captain A. H. M.
Sutcliffe, H.


Macnamara, Lieut.-Colonel J. R. J.
Rathbone, Eleanor (English Univ's.)
Tasker, Sir R. I.


Magnay, T.
Rawson, Sir Cooper
Tate, Mavis C.


Maitland, Sir Adam
Reed, Sir H. S. (Aylesbury)
Taylor, Vice-Adm. E. A. (Padd., S.)


Makins, Brigadier-General Sir Ernest
Remer, J. R.
Thomas, J. P. L.


Margesson, Capt. Rt. Hon. H. D. R.
Rickards, G. W. (Skipton)
Thorneycroft, G. E. P.


Markham, S. F.
Ropner, Colonel L.
Thornton-Kemsley, C. N.


Marsden, Commander A.
Rosbotham, Sir T.
Touche, G. C.


Maxwell, Hon. S. A.
Ross Taylor, W. (Woodbridge)
Train, Sir J.


Medlicott, F.
Royds, Admiral Sir P. M. R.
Tufnell, Lieut.-Commander R. L.


Millar, Sir R. J. (Mitcham)
Ruggles-Brise, Colonel Sir E. A.
Turton, R. H.


Mellor, Sir J. S. P. (Tamworth)
Russell, Sir Alexander
Walker-Smith, Sir J.


Mills, Sir F. (Layton, E.)
Salmon, Sir I
Wallace Capt. RL Hon. Euan


Mills, Major J. D. (New Forest)
Salt, E. W.
Ward, Lieut.-Col. Sir A. L. (Hull)


Mitchell, Sir W. Lane (Streatham)
Salter, Sir J. Arthur (Oxford U.)
Warrender, Sir V.


Moore, Lieut.-Col. Sir T. C. R.
Samuel, M. R. A.
Watt, Lt.-Col. G. S. Harvie


Morgan, R. H. (Worcester, Stourbridge)
Sandeman, Sir N. S.
Wayland, Sir W. A


Morris-Jones, Sir Henry
Schuster, Sir G. E.
Wells, Sir Sydney


Mormon, G. A. (Scottish Univ's.)
Scott, Lord William
Whiteley, Major J. P. (Buckingham)


Nall, Sir J.
Shaw, Captain W. T. (Forfar)
Williams, H. G, (Croydon, S.)


Neven-Spence, Major B. H. H.
Shepperson, Sir E. W.
Willoughby de Erasby, Lord


Nicolson, Hon. H. G.
Simon, Rt. Hon. Sir J. A.
Wilson, Lt.-Col. Sir A. T. (Hitchin)


O'Connor, Sir Terence J
Smith, Bracewell (Dulwleh)
Windsor-Clive, Lieut.-Colonel G.


Orr-Ewing, I. L.
Smith, Sir R. W. (Aberdeen)
Winterton, Rt. Hon. Earl


Palmer, G. E. H.
Smithers, Sir W.
Wise, A. R.


Peake, O.
Snadden, W. McN.
Womersley, Sir W. J.


Peat, C. U.
Somerville, Sir A. A. (Windsor)
Wright, Wing-commander J. A. C.


Perkins, W. R. D.
Southby, Commander Sir A. R. J.
Young, A. S. L. (Partick)


Peters, Dr. S. J.
Spears, Brigadier-General E. L.



Pickthorn, K. W. M.
Spent, W. P.
TELLERS FOR THE AYES.—


Pilkington, R.
Stanley, Rt. Hon. Oliver (W'm'l'd)
Captain Waterhouse and Mr. Munro




NOES.


Adams, D. (Consett)
Hardie, Agnes
Richards, R. (Wrexham)


Adams, D. M. (Poplar, S.)
Harris, Sir P. A.
Ridley, G.


Adamson, W. M.
Henderson, A. (Kingswinford)
Riley, B.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Henderson, J. (Ardwick)
Ritson, J.


Ammon, C. G.
Henderson, T. (Tradeston)
Roberts, W.(Cumberland, N.)


Barnes, A. J.
Hills, A. (Pontefract)
Robinson, W. A. (SI. Helens)


Barr, J.
Hopkin, D.
Rothschild, J. A. de


Batey, J.
Jagger, J.
Sanders, W. S.


Beaumont, H. (Batley)
Jenkins, A. (Pontypool)
Seely, Sir H. M.


Bellenger, F. J.
Jenkins, Sir W. (Neath)
Sexton, T. M.


Benn, Rt. Hon. W. W.
John, W.
Shinwell, E.


Benson, G.
Jonas, A. C. (Shipley)
Silkin, L.


Bevan, A.
Kennedy, Rt. Hon. T.
Silverman, S. S.


Brown, C. (Mansfield)
Kirby, B. V.
Simpson, F. B.


Buchanan, G.
Kirkwood, D.
Smith, Ben (Rotherhithe)


Burke, W. A.
Lawson, J. J.
Smith, E. (Stoke)


Cape, T.
Leach, W.
Smith, Rt. Hon. H. B. Lees- (K'ly)


Cluse, W. S.
Lee, F.
Smith, T. (Normanton)


Clynes, Rt. Hon. J. R.
Leonard, W.
Sorensen, R. W.


Collindridge, F.
Leslie, J. R.
Stephen, C.


Daggar, G.
Logan, D. G.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Davidson, J. J. (Maryhill)
Lunn, W.
Strauss, G. R. (Lambeth, N.)


Davies, R. J. (Westhoughton)
Macdonald, G. (Ince)
Taylor, R. J. (Morpeth)


Day, H.
McEntee, V. La T.
Thorne, W.


Dobbie, W.
McGhee, H. G.
Thurtle, E.


Dunn, E. (Rother Valley)
McGovern, J.
Tinker, J. J.


Ede, J. C.
MacLaren, A.
Viant, S. P.


Edwards, A. (Middlesbrough E.)
Maclean, N.
Walker, J.


Edwards, Sir C. (Bedwellty)
Mainwaring, W. H.
Watkins, F. C.


Edwards, N. (Caerphilly)
Mander, G. le M.
Watson, W. McL.


Evans, D. O. (Cardigan)
Marshall, F.
Wedgwood, Rt. Hon. J. C.


Fletcher, Lt.-Comdr. R. T. H.
Mathers, G.
Welsh, J. C.


Gullacher, W.
Maxton, J.
Westwood, J.


Gardner, B. W.
Montague, F.
White, H. Graham


Garro Jones, G. M.
Morgan, J. (York, W.R., Doncaster)
Whiteley, W. (Blaydon)


George, Major G. Lloyd (Pembroke)
Morrison, R. C. (Tottenham, N.)
Wilkinson, Ellen


Gibson, R. (Greenock)
Naylor, T. E.
Williams, E. J. (Ogmore)


Green, W. H. (Deptford)
Noel-Baker, P. J 
Williams, T. (Don Valley)


Greenwood, Rt. Hon. A.
Owen, Major G.
Wilson, C. H. (Attercliffe)


Grenfell, D. R.
Paling, W.
Windsor, W. (Hull, C.)


Griffith, F. Kingsley (M'ddl'sbro, W.)
Parker, J.
Woods, G. S. (Finsbury)


Griffiths, G. A. (Hemsworth)
Pearson, A.



Griffiths, J. (Llanelly)
Pethick-Lawrence, Rt. Hon. F. W.
TELLERS FOR THE NOES.— 


Hall, G. H. (Aberdare)
Price, M. P.
Mr. Charleton and Mr. Groves.


Hall, J. M. (Whitechapel)
Pritt, D. N.

BILL PRESENTED.

WAR RISKS INSURANCE BILL,

"to make provision for authorising the Board of Trade, in the event of war and in other circumstances, to undertake the insurance of ships and other goods; for the payment by the Board of Trade, in time of war, of compensation in respect of goods lost or damaged in transit; for requiring persons to insure goods against certain risks in time of war; and for purposes connected with the matters aforesaid," present by Mr. Stanley; supported by the Chancellor of the Exchequer, the Attorney-General and Mr. Cross; to be read a Second time To-morrow, and to be printed. [Bill 195.]

MINING INDUSTRY (AMENDMENT) BILL.

Reported, without Amendment, from Standing Committee C.

Bill, not amended (in the Standing Committee), to be considered To-morrow.

Minutes of Proceedings to be printed.

AIR SERVICES (SUPPLEMENTARY ESTIMATES, 1939).

Estimate presented,—of a further Sum required to be voted for Air Services for the year ending 31st March, 1940 [by Command]; Referred to the Committee of Supply, and to be printed. [No. 149.]

CIVIL ESTIMATES (SUPPLEMENTARY ESTIMATES, 1939).

Estimate presented,—of a further Sum required to be voted for the service of the year ending 31st March, 1940 [by Command]; Referred to the Committee of Supply, and to be printed. [No. 150.]

MEDWAY CONSERVANCY BILL [Lords].

Reported, with Amendments, from the Committee on Group H of Private Bills (with Report on the Bill).

Bill, as amended, and Report to lie upon the Table; Report to be printed.

SELECTION (STANDING COMMITTEES).

Standing Committee A.

Sir Charles MacAndrew reported from the Committee of Selection; That they had discharged the following Member from Standing Committee A: Colonel Baldwin-Webb; and had appointed in substitution: Sir Percy Hurd.

Standing Committee B.

Sir Charles MacAndrew further reported from the Committee; That they had added the following Ten Members to Standing Committee B (in respect of the Highways Protection Bill): Captain Sir William Brass, Mr. Cary, Mr. Erskine Hill, Mr. James Hall, Captain Austin Hudson, Mr. McEntee, Mr. MacLaren, Mr. Medlicott, Mr. Petherick and Mr. H. Strauss.

Reports to lie upon the Table.

SELECTION (BRITISH OVERSEAS AIRWAYS BILL SELECT COMMITTEE).

Sir Charles MacAndrew reported from the Committee of Selection; That they had nominated the following three Members to serve on the Select Committee on the British Overseas Airways Bill: Mr. Lathan, Mr. Peat and Sir Alexander Russell.

Report to lie upon the Table.

MESSAGE FROM THE LORDS.

That they have agreed to—

St. Helens Corporation (Trolley Vehicles) Provisional Order Bill,

Southend-on-Sea Corporation Trolley Vehicles) Provisional Order Bill, without Amendment.

Amendments to—

Marriage (Scotland) Bill [Lords'],

Patents and Designs (Limits of Time) Bill [Lords], without Amendment.

AGRICULTURAL DEVELOPMENT BILL.

Reported, with Amendments, from Standing Committee D.

Bill, as amended (in the Standing Committee), to be considered upon Thursday, and to be printed. [Bill 196.]

Minutes of Proceedings to be printed. [No. 151.]

Orders of the Day — FINANCE BILL.

Order for Consideration, as amended, read.

Motion made, and Question,
That the Bill be re-committed to a Committee of the Whole House in respect of the Amendments in Clause 21, page 23, line 9, and Clause 28, page 31, line 4, standing on the Notice Paper in the name of Mr. Chancellor of the Exchequer."—[Mr. Burgin]

put, and agreed to.

Bill accordingly considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

CLAUSE 21.—(Meaning of "armament business" and "armament contract.")

3.59 P.m.

The Minister without Portfolio (Mr. Burgin): I beg to move, in page 23, line 9, at the end, to insert:
or

(iii) a contract for the supply of anything which is being acquired by the Crown under the Essential Commodities Reserves Act, 1938, if similar supplies are also being acquired by the Crown under contracts which are armament contracts by virtue of sub-paragraph (i) of this paragraph; or
(iv) a contract for the supply of anything which is being acquired by the Crown otherwise than under the said Act as being something which would be essential for the needs of the community in the event of war."
This is the first of a series of Government Amendments intended to implement the undertakings given during the passage of the Bill in Committee. In defining the exact nature of an armament contract the draftsman inserted words partly general and partly very particular and when the matter was discussed in Committee two or three points arose. In taking steps to implement the undertaking given to the Committee with regard to food the draftsman has supplied words which cure another deficiency. The Committee will be aware that whilst this legislation has been before the House the Ministry of Supply Bill has also been advancing its stages. Under the Ministry of Supply Bill there is considerable power to acquire for the needs of the community in time of war.
I was anxious, therefore, that in any redrafting of the Clause which defines

an armament contract we should be careful not only to include purchases under the Essential Commodities Reserves Act but also purchases under the Ministry of Supply Act when it becomes an Act. Therefore this Amendment is moved to insert two types of contracts which come within the armament definition: first,
a contract for the supply of anything which is being acquired by the Crown under the Essential Commodities Reserves Act, if similar supplies are also being acquired by the Crown under contracts which are armament contracts by virtue of sub-paragraph (i).
I pause to explain that. The Committee pointed out a number of types of food which in their judgment could probably come within the definition of armament contracts. Wherever food is purchased in bulk by one of the defence services that is automatically, under sub-paragraph (a), an armament contract.
The object of the first part of the Amendment I have moved, is to include contracts of food purchases under the Essential Commodities Reserves Act for reserves, provided that the type of substance which is being purchased is similar to a substance being purchased by the defence forces of the Crown under direct contract. The second part of the Amendment is to include Ministry of Supply purchases, and as the Ministry of Supply Bill is not yet an Act the proper wording is:
for the supply of anything which is being acquired by the Crown otherwise than under the Essential Commodities Reserves Act as being something which would be essential for the needs of the community in the event of war.
These matters are not simple to explain in easy language, but I hope that the Committee will allow me to give an assurance that this Amendment carries out an undertaking given at another stage and implements the promise then given

4.4 p.m.

Mr. Pethick-Lawrence: It will be remembered that in Committee we raised a considerable number of points because we thought that the Bill did not go far enough. Though we were not at all satisfied with the extensions which the right hon. Gentleman promised, we did take account of the promise he made, and so far as these benches are concerned it appears to us that the promise which the right hon. Gentleman made is implemented by the Amendment which he proposes.


In the circumstances I need not take up any further time in discussing the matter.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 28.—(Interpretation, etc.)

4.5 p.m.

Mr. Burgin: I beg to move, in page 31, line 4, at the end, to insert:
(3) Any order of the Minister under the said provisions shall, as soon as may be after the making thereof, be laid before the Commons House of Parliament, and if that House of Parliament, within the period of forty days beginning with the day on which any such order is laid before it, resolves that the order be annulled it shall thereupon become void, without prejudice, however, to anything previously done there under or to the making of a new order.
In reckoning any such period of forty days as aforesaid, no account shall be taken of any time during which Parliament is dissolved or prorogued, or during which the Commons House of Parliament is adjourned for more than four days.
There is under the Bill a power to make an order which will have the effect of excluding from the operation of Armament Profits Duty articles and materials which the Minister states should not come within that operation. It was felt by the Committee, and the opinion was expressed, that while discretion was given, this was a tremendous power to give to a Minister to exempt certain articles and materials, and that Parliament had very little control over the matter. Realising the force of that argument and not wishing to have the responsibility of exercising a power which the House thought was too widely drawn, I have felt it right to insert here a provision that any order made by the Minister under this proviso, enabling articles and materials to be exempted from taxation should be subject to a negative resolution; in other words the order should be laid upon the Table of the House with a proper explanation and be subject to the ordinary negative rule which will enable a Prayer to be made against the order. That has the effect of sharing in some measure the responsibility; it has the effect of enabling these orders to be tabled properly and for the House to discuss them. I repeat the statement that I made before, that it is intended to use this proviso extremely sparingly, that it is the desire to include as much as possible, that this power to

exempt is intended only in the interests of administration; but I am very happy to be able to move that any order made by the Minister under this provision should be subject to being laid on the Table of the House and come within the negative resolution procedure with which Members of the Committee are familiar.

4.8 p.m.

Mr. Pethick-Lawrence: I am always l0th to see these powers given to a Minister to make orders which do not come forward for the approval of Parliament. Certainly under the Bill as drafted very wide and exceptional powers were given. These Prayers are never very satisfactory, because they generally come on late at night and there is very little that the House can do about them. But it is some small safeguard that the Minister has seen his way to make a concession in regard to this case.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Bill reported, with Amendments; as amended (in Committee and on re-committal), considered.

Mr. Speaker: The first Clause I shall take is that in the name of the right hon. Member for Keighley (Mr. Lees-Smith).

Mr. Mander: On a point of Order. In view of the fact that the Clause (Conscription of Wealth Preparatory Provisions) standing in my name was not discussed at all in Committee and that very widespread interest is taken in the country in the principle involved, though it meets with a great deal of opposition from hon. Members opposite, will you consider the advisability of providing an opportunity for discussion?

Mr. Speaker: This is not the time to discuss it.

NEW CLAUSE.—(Allowance in respect of earned incomes.)

Section fifteen of the Finance Act, 1925 (which, as amended by Section eight of the Finance (No. 2) Act, 1931, makes provision for an allowance in respect of earned incomes), shall have effect as if the word "one-fourth" were substituted for the word "one-fifth."—[Mr. Lees-Smith.]

Brought up, and read the First time.

4.11 p.m.

Mr. Lees-Smith: I beg to move, "That the Clause be read a Second time."
This Clause deals with a point which is not new to the House. It is put down in order to raise the question of the differentiation of Income Tax which is at present permitted for earned as distinct from unearned income. The House knows quite well that under the Income Tax earned income is at present allowed an abatement of one-fifth. The object of the new Clause is to increase that abatement to one-fourth. I can put the point very shortly by taking a concrete case to show what it will mean. It is the case of a typical small earned income, the case of a doctor whose earnings, I shall assume, are £600 a year. Under the abatement he will be allowed one-fifth and therefore be allowed to deduct £120 a year, and he will pay Income Tax on £480. That is to say he will pay the same amount as a man living on an unearned income of £480, because the unearned income has no deduction at all. The present position, therefore, is that a doctor earning £600 a year is in the same position as a man with an unearned income of £480 a year.
The new Clause says that the tax-paying capacity of a doctor earning £600 a year is not as great as that of a man living on an unearned income of £480. The reason is this: The doctor's income is a precarious income. If he dies it goes. When he goes on a holiday it is suspended, and if he is ill it is suspended. When he retires it is bound to come to an end. He is expected to put aside about one-sixth of his income every year for insurance in case of death or retirement. This should be taken into account. But take the case of a man living on an unearned income of £480 a year. I am assuming the case of an unmarried man in each instance and am not allowing for deduction in either case. He is not subjected to all the changes and chances of life as the young doctor is. He can go on holiday without his income ceasing. If he dies, the income continues for his dependants. There is no reason for him to take one-sixth of his income for insurance for his old age. In those conditions, we feel that there is a greater difference between the two than is represented by one-fifth of the tax-paying capacity. I do not say that the figure I am about to give is conclusive, but I think that, in discussing this matter, a good deal of weight should be attached to the capital value of their income. In the case of a man living

on an income from War Loan amounting to £480, if it is at 3 ½ per cent., the capital value is £14,000. What is the capital value of a doctor earning £600 a year? I believe that usually it is two years' purchase. Therefore, the capital value of his income is £1,200. Although this is not conclusive, it shows a great difference in the estimation of the stability of the two types of income.
The terms of the new Clause would enable me to speak on the different results of taxing earned and unearned income, but I do not intend to do that, for we had a long discussion on the matter in the Second Reading Debate, and I propose to continue the Debate with the Chancellor of the Exchequer on some other opportunity. I know that the Financial Secretary to the Treasury will tell me that this new Clause is a hardy annual. I have looked up some of these hardy annuals and I have found that, after a time, most of them become Clauses in the Finance Bill. I should like to refer to the history of this proposal. When I first began to pay Income Tax on a small income, the position of the earned income taxpayer was better than it is at the present time. In those days, I had an allowance of one-third. I could deduct that amount. Then there was appointed a Royal Com-mission on Income Tax as a result of which there was a great number of changes, and one of them was that suddenly there was, in 1920, a diminution in the deduction of one-third to what is now generally regarded as having been the quite inadequate amount of one-tenth. That proposal passed through the House without any discussion, but no sooner had it passed than the House realised that it was not enough, and in 1921, this hardy annual was first planted, and this sort of new Clause began to come up on the Committee and Report stages. It has borne fruit. In 1925, after it had been moved year after year, the one-tenth was reduced to one-sixth, and a few years later, in 1931, it was reduced to one-fifth. I would observe that when it was reduced to one-fifth it was in the "economy" Budget, when an enormous burden had to be borne in other directions. I have no doubt that eventually we shall return to the original deduction of one-third, and it is as a step towards that, that I am moving this new Clause


which would make the allowance one-fourth.

4.19 p.m.

The Chancellor of the Exchequer (Sir John Simon): My right hon. and gallant Friend the Financial Secretary to the Treasury was so much moved by the anticipation of what he would say that he required me to make a reply instead of himself. The right hon. Gentleman the Member for Keighley (Mr. Lees-Smith) has for years taken an interest in this subject, and I recall very well the more general, philosophical review of the comparison between earned and unearned income which he made recently. With regard to the new Clause, what the right hon. Gentleman is asking me to do is to sacrifice in a full year the sum of £8,500,000. I am afraid I cannot do that. The controversy about earned and unearned income goes back a long way, and I think I am right in saying that some of the old authorities—and I am not sure that the great name of Mr. Gladstone has not been mentioned in this connection—denied that such a difference could be effectively drawn. The difference was drawn, I think, in one of Mr. Asquith's Budgets, and I have always thought that it was an interesting piece of Income Tax law because, as far as I know, there has never been any controversy, litigation or decided cases about this distinction between earned and unearned income since then. It is one of the changes which, whether it was right or wrong, has worked with the minimum of dispute, misunderstanding or controversy. There is no doubt that we can make a most effective distinction between the two. Hon. Members recognise that income is called unearned, if, in fact, it is nothing more than the investment of an amount which, after years and years of hard work, a person has succeeded in accumulating and from which he secures a small return.
To the history of the matter as stated broadly by the right hon. Gentleman, there is one small addition I would make. When the new system began in 1920 the allowance of one-tenth was made, and then in 1925 it was increased to one-sixth; it is true that it was followed, in 1931—a year of strain and difficulty—by the more generous provision of one-fifth; but the right hon. Gentleman did not add that that was only part of a scheme then

proposed by Mr. Snowden, and that it was combined with a cut in personal allowances of different kinds which would have borne very severely on people of small incomes. While, under the arrangements of 1931, very heavy cuts in personal allowances were imposed, the Chancellor of the Exchequer at that time did make a distinction between earned and unearned income in the matter of this allowance of one-fifth. What has happened since then is that the personal allowances have been increased. The personal allowance does not to-day stand at the figure for 1931. Consequently, to-day the allowances are worth more to some persons than was the case in 1931. Although the standard rate to-day is 5s. 6d., the smaller earned Income Tax payer is better off to-day than he was under the second Finance Act of 1931. He has higher personal allowances and there is a smaller charge of tax on the first slice of taxable income.

Mr. Bellenger: Did the right hon. Gentleman say that there are higher personal allowances to-day?

Sir J. Simon: I said that he has more personal allowances than he had in 1931.

Mr. Bellenger: In the case of a married couple, the allowance is less than it was.

Sir J. Simon: If the hon. Gentleman will take the personal allowances altogether, I think he will find that my statement is correct and that to-day, taking all the allowances together and setting them against what I agree is the subject of immediate debate, namely, the one-fifth, I think the hon. Gentleman will find that the smaller earned Income Tax payer to-day is better off than he was under the second Finance Act of 1931. I had figures printed last year which showed exactly what the burden was. There is a smaller charge of tax, there is no increased charge of tax on the first slice of income, whereas personal allowances and children's allowances are higher. I am sorry that it is not possible for me to agree that we should alter the present deduction of one-fifth. Whether the right hon. Gentleman was right in saying that he could already foresee the time when it would be reduced to one-third, I do not know. In the matter of prophecies, there is competition, but at any rate I must say, not as a matter of


prophecy, but as a matter of present decision, that I cannot see my way to increase the allowance.

4.27 p.m.

Mr. Benson: During the proceedings on the Finance Bill, the right hon. Gentleman the Chancellor of the Exchequer has twice opposed a new Clause of this character. On the first occasion he suggested that in reality unearned income is taxed equally with earned income and that, in fact, Death Duties are taken from the source on unearned income. This afternoon he has suggested that unearned income has come into being as a result of years of hard work. That theory may apply to smaller estates which give only small amounts of unearned income, but certainly it does not apply in the case of larger estates. It is quite impossible to build up a large fortune by savings on income, for the Surtax prevents that. The source of very large fortunes and of very large incomes is, of course, in the accretions of capital which are not taxed at all. If one takes the figures of Death Duties published by the Board of Inland Revenue, one finds that from year to year there is a steady increase in the capital value of this country and in the amount of estates coming under review for Death Duties. It is obvious that there is a very large amount of capital accretion which does not bear any tax until Death Duties are paid.
I do not think the right hon. Gentleman can claim that the bulk of the capital of this country is the result of individual savings from taxed income or that the differentiation which we think there should be between earned and unearned income is really made up by Death Duties. I think the main difference between hon. Members on this side and hon. Members opposite is in our attitude towards the question of unearned income. Hon. Members on this side are not prepared to admit the right to its existence. We are not prepared to admit that there is any moral justification for unearned income. The demand that there should be a big differentiation in the rate of taxation on earned and unearned income is not merely a question of obtaining one more small allowance for the less wealthy members of the community, but is an attempt to state the moral principle that there is no justification for unearned income.
I must say that the mere fact that this allowance would cost £8,500,000 does not affect me very much. We are stating here definitely the proposition, and this Amendment flows from the proposition, that it is not right that unearned income from investments should be in the hands of private individuals. Saving there must be, but saving should be for the benefit of the community as it will be when the means of exchange are in the hands of the community. What we are asking here—I know that we are asking it in vain—is for a declaration that, as a moral principle, unearned income is indefensible.

4.31 p.m.

Mr. Radford: I had not intended to intervene in this Debate, but I must oppose the doctrine which has just been enunciated from the benches opposite that no unearned income is justifiable. Take the hypothetical case of the doctor referred to by the Mover of the Clause with an earned income of £600 a year. One doctor may spend his £600 a year: another may be a quiet frugal man who saves half his income. Yet the hon. Gentleman opposite argues that the thrifty doctor is not justified in having any income whatever from the fruits of his self denial. I am astonished to hear an intelligent man like the hon. Member for Chesterfield (Mr. Benson) enunciating such a doctrine to be heard and absorbed by the country at a time when everybody recognises that saving on the part of the whole community is essential if we are to finance the huge commitments which have been imposed upon us.

4.33 p.m.

Mr. Graham White: I, like the hon. Member opposite, had no intention of taking part in the discussion at this stage, but I was somewhat touched by the moral appeal made by the hon. Member for Chesterfield (Mr. Benson) with whom more often than not I find myself in agreement. But my experience in connection with Finance Bills in recent years is, that I always receive among my correspondence a large number of appeals to support Amendments designed to secure the extention of privileges to incomes now treated as unearned, which the recipients consider should be treated as earned. Only the day before yesterday, I received a most pitiable letter presenting a case


which had, it seemed to me, both moral right and justice on its side. It was from an artist of some distinction who, having worked for many years, had just been able to accumulate enough money to buy a small annuity of between £300 and £400 a year. There does not seem to me to be anything immoral about that procedure. In fact, I should be prepared to argue that that income should be treated as earned and should receive relief accordingly. I hope the view will not prevail that proceedings of that kind are, in any sense, immoral. I am sure we could all multiply such cases from our own experience. There are people to-day living on small incomes which are, in the fullest sense, earned incomes because they have been earned by the recipients during many arduous years of work. It would be a grateful task for me and no doubt for many other hon. Members to argue, without any implications of immorality, that some extension of relief should be given in those cases.

4.36 p.m.

Mr. Bellenger: I should like to say that in my interchange with the Chancellor just now on the question of personal allowances, I thought the right hon. Gentleman was referring to the first Budget in 1931. Of course, the personal allowances, at any rate in the case of married couples, were higher then than they are to-day, but the second Budget—the economy Budget—revised those personal allowances, and brought them down to lower figures. To-day they are higher and in that respect, we are all thankful for small mercies wherever they may come from. I do not want to go into the academic side of the discussion on the question between earned and unearned income. I am more concerned with the case of the man or woman earning an income as in the case put by my right hon. Friend the Member for Keighley (Mr. Lees-Smith), of the doctor or other professional man who, in the majority of cases, earns his income by dint of hard work and long hours. There should be a considerable differentiation between those incomes and unearned incomes and when I use the expression "unearned incomes" I have in mind estates like the Ellerman estate which according to the public Press has increased out of all proportion since the last death occurred.
If it is possible under our present system for unearned income to accumulate like that, first in the form of capital appreciation and then by investment and re-investment to produce larger and larger sums for the owners of the capital, I think there is some immorality about it. Whereas the hard-working doctor or professional man can only increase his earned income by £100 and £200 a year, however many hours of work he puts in, these owners of large blocks of capital can increase their income by leaving it to the ordinary process of capital accretion. There is one other form of unearned income in which the Chancellor used to take a personal interest and which used to be called "unearned increment." We have heard how it is possible for fortunes to be made by sales of land.

Mr. Speaker: The hon. Member is now getting beyond the scope of this new Clause.

Mr. Bellenger: I thought, Mr. Speaker, you might take that view, and I only mentioned that case in passing. What I was about to point out was that it is those sources of unearned income which we have in mind, and which prompted my right hon. Friend to put down this Clause. We do not expect the right hon. Gentleman to make this concession if it is going to cost £8,500,000. We realise that, at this stage, that is probably too much to ask, but I suggest that a case has been put which ought to persuade the right hon. Gentleman or his successor—perhaps his right hon. and gallant Friend the Financial Secretary if he should occupy that position later—to grant this concession to those possessors of small earned incomes who work very hard for what they get, and who are entitled to more consideration than the possessors of unearned incomes.

Mr. Pethick-Lawrence: I do not wish to go into this question in any detail, but I would like to answer the point made by the hon. Member for Rusholme (Mr. Radford). He said he intervened in the Debate only to point out how hard it would be on the doctor who had saved his money, if this Clause were carried.

Mr. Radford: I did not suggest that at all. I only said that the right of that doctor to the income which his self-denial and economy had produced for him,


should not be called in question. That was my point. I entirely agree that the Clause is an additional relief to the doctor in that case.

Mr. Pethick-Lawrence: I am glad to have that explanation. I was just about to point out that if a doctor has been in practice for, say, 40 years and then has a period of retirement, and if there was an adjustment as between earned and invested income in the matter of Income Tax, the man who had been able to save during all his professional life

would be far better off under this Amendment, even if, in the years of retirement he had a slightly heavier burden to bear owing to the shift over on to the invested income. However, as the hon. Member disclaims any intention of opposing the Clause, I hope we shall see him with us in the Lobby.

Question put, "That the Clause be read a Second time."

The House Divided: Ayes, 132; Noes, 236.

Division No. 230.]
AYES.
[4.41 p.m.


Adams, D, (Consett)
Griffiths, G. A. (Hemsworth)
Pearson, A.


Adams, D. M. (Poplar, S.)
Griffiths, J. (Llanelly)
Pethick-Lawrence, Rt. Hon. F. W.


Adamson, W. M.
Groves, T. E.
Price, M. P.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Hall, G. H. (Aberdare)
Pritt, D. N.


Anderson, F. (Whitehaven)
Hall, J. H. (Whitechapel)
Richards, R. (Wrexham)


Banfield, J. W.
Hardie, Agnes
Ridley, G.


Barnes, A. J.
Harris, Sir P. A.
Riley, B.


Barr, J
Harvey, T. E. (Eng. Univ's.)
Ritson, J.


Bartlett, C. V. O.
Henderson, A. (Kingswinford)
Roberts, W. (Cumberland, N.)


Batey, J.
Henderson, J. (Ardwick)
Robinson, W. A. (St. Helens)


Beaumont, H. (Batley)
Henderson, T. (Tradeston)
Sanders, W. S.


Bellenger, F. J.
Hills, A. (Pontefract)
Seely, Sir H. M.


Benson, G.
Hopkin, D.
Sexton, T. M.


Bevan, A.
Jagger, J.
Shinwell, E.


Brown, C. (Mansfield)
Jenkins, Sir W. (Neath)
Silverman, S. S.


Buchanan, G.
John, W.
Simpson, F. B.


Burke, W. A.
Johnston, Rt. Hon. T.
Smith, Ben (Rotherhithe)


Cape, T.
Jones, A. C. (Shipley)
Smith, E. (Stoke)


Charlaton, H. C.
Jones, Sir H. Haydn (Merioneth)
Smith, Rt. Hon. H. B. Lees- (K'ly)


Cluse, W. S.
Kennedy, Rt. Hon. T.
Smith, T. (Normanton)


Clynes, Rt. Hon. J. R.
Kirkwood, D.
Sorensen, R. W.


Collindridge, F,
Lawson, J. J.
Stephen, C.


Cove, W. G.
Leach, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Cripps, Hon. Sir Stafford
Lee, F.
Stokes, R. R.


Daggar, G.
Leonard, W.
Strauss, G. R. (Lambeth, N.)


Davidson, J. J. (Maryhill)
Leslie, J. R.
Taylor, R. J. (Morpeth)


Davies, R. J. (Westhoughton)
Logan, D. G.
Thorne, W.


Dobbie, W.
Lunn, W.
Tinker, J. J.


Dunn, E. (Rother Valley)
Macdonald, G. (Ince)
Tomlinson, G.


Ede, J. C.
McEntee, V. La T.
Viant, S. P.


Edwards, A. (Middlesbrough E.)
McGhee, H. G.
Walker, J.


Edwards, Sir C. (Bedwellty)
McGovern, J.
Watkins, F. C.


Edwards, N. (Caerphilty)
MacLaren, A.
Watson, W. McL.


Evans, E. (Univ. of Wales)
Maclean, N.
Welsh, J. C.


Fletcher, Lt.-Comdr. R. T. H.
Mainwaring, W. H.
Westwood, J.


Foot, D. M.
Marshall, F.
White, H. Graham


Gallacher, W.
Maxton, J,
Wilkinson, Ellen


Gardner, B. W.
Montague, F.
Williams, E. J. (Ogmore)


Garro Jones, G. M.
Morgan, J. (York, W.R., Doncaster)
Williams, T. (Don Valley)


George, Major G. Lloyd (Pembroke)
Morrison, R. C. (Tottenham, N.)
Wilson, C. H. (Attercliffe)


Gibson, R. (Greenock)
Naylor, T. E.
Windsor, W. (Hull, C.)


Green, W. H. (Deptford)
Noel-Baker, P. J.
Woods, G. S. (Finsbury)


Greenwood, Rt. Hon. A.
Owen, Major G.



Grenfell, D. R.
Paling, W.
TELLERS FOR THE AYES.—


Griffith, F. Kingsley (M'ddl'sbro, W.)
Parkinson, J. A.
Mr. Whiteley and Mr. Mathers.




NOES.


Acland-Troyte, Lt.-Col. G. J.
Beamish, Rear-Admiral T. P. H.
Brooklebank, Sir Edmund


Adams, S. V. T. (Leeds, W.)
Beauchamp, Sir B. C.
Brooke, H. (Lewisham, W.)


Albery, Sir Irving
Beaumont, Hon. R. E. B. (Portsm'h)
Brown, Rt. Hon. E. (Leith)


Allen, Col. J. Sandeman (B'knhead)
Beit, Sir A. L.
Brown, Brig.-Gen. H. C. (Newbury)


Anderson, Sir A. Garrett (C. of Ldn.)
Bennett, Sir E. N.
Bullock, Capt. M.


Anderson, Rt. Hn. Sir J. (So'h Univ's)
Blair, Sir R.
Burgin, Rt. Hon. E, L.


Anstruther-Gray, W. J.
Boothby, R. J. G.
Burton, Col. H. W.


Aske, Sir R. W.
Bessom, A. C.
Butcher, H. W.


Assheton, R.
Boulton, W. W.
Cartland, J. R. H.


Baillie, Sir A. W. M.
Boyce, H. Leslie
Carver, Major W. H.


Baldwin-Webb, Col. J.
Bracken, B.
Carver, Sir C. W, (City of Chester)


Balniel, Lord
Braithwaite, Major A. N. (Buckrose)
Chamberlain, Rt. Hn. N. (Edgb't'n)


Barrie, Sir C. C.
Brass, Sir W.
Channon, H.


Baxter, A. Beverley
Broadbridge, Sir G. T.
Chapman, A. (Rutherglen)




Chapman, Sir S. (Edinburgh, S.)
Hudson, Rt. Hon. R. S. (Southport)
Rosbotham, Sir T.


Christie, J. A.
Hunloke, H. P.
Ross Taylor, W. (Woodbridge)


Clarke, Colonel R. S. (E. Grinstead)
Hunter, T.
Rowlands, G.


Clarry, Sir Reginald
Inskip, Rt. Hon. Sir T. W. H.
Royds, Admiral Sir P. M. R.


Clydesdale, Marquess of
Jones, L. (Swansea W.)
Huggles-Brise, Colonel Sir E. A.


Cobb, Captain E. C. (Preston)
Keeling, E. H.
Russell, Sir Alexander


Calfox, Major Sir W. P.
Kellett, Major E. O.
Russell, S. H. M. (Darwen)


Conant, Captain R. J. E.
Karr, Colonel C. I. (Montrose)
Salt, E. W.


Cook, Sir T. R. A. M. (Norfolk, N.)
Kerr, H. W. (Oldham)
Samuel, M. R. A.


Cooke, J. D. (Hammersmith, S.)
Kerr, Sir John Graham (Sco'sh Univs.)
Sandeman, Sir N. S.


Cooper, Rt. Hn. A. Duff (W'st'r S.G'gs)
Keyes, Admiral of the Fleet Sir R.
Sahuster, Sir G. E.


Courthope, Col. Rt. Hon. Sir G. L.
Kimball, L.
Scott, Lord William


Crooke, Sir J. Smedley
Lamb, Sir J. Q.
Shaw, Captain W. T. (Forfar)


Crookshank, Capt. Rt. Hon. H. F. C.
Leech, Sir J. W.
Shepperson, Sir E, W.


Cross, R. H.
Lennox-Boyd, A. T. L.
Shute, Colonel Sir J. J.


Crossley, A. C.
Levy, T.
Simon, Rt. Hon. Sir J. A.


Crowder, J. F. E.
Liddall, W. S.
Smith, Bracewell (Dulwich)


Culverwell, C. T.
Lipson, D. L.
Smith, Sir R. W. (Aberdeen)


Da la Bère, R.
Llewellin, Colonel J. J,
Smithers, Sir W.


Denman, Hon. R. D.
Lloyd, G. W.
Snadden, W. McN.


Danville, Alfred
Locker-Lampson, Comdr. O. S.
Somerville, Sir A. A. (Windsor)


Doland, G. F.
Loftus, P. C.
Southby, Commander Sir A. R. J.


Dorman-Smith, Col. Rt. Hon. Sir R. H.
MacAndrew, Colonel Sir C. G.
Spears, Brigadier-General E. L.


Drewe, C.
McCorquodale, M. S.
Spent, W. P.


Dugdale, Captain T. L.
McEwen, Capt. J. H. F.
Stanley, Rt. Hon. Oliver (W'm'l'd)


Duggan, H. J.
McKie, J. H.
Stewart, J. Henderson (Fife, E.)


Duncan, J. A. L.
Macnamara, Lt.-Col. J. R. J.
Staurton, Major Hon. J. J.


Eden, Rt. Hon. A.
Magnay, T.
Strauss. H. G. (Norwich)


Edmondson, Major Sir J.
Makins, Brigadier-General Sir Ernest
Strickland, Captain W. F.


Ellis, Sir G.
Manningham-Buller, Sir M.
Stuart, Hon. J. (Moray and Nairn)


Elliston, Capt. G. S.
Margesson, Capt. Rt. Hen, H. D. R.
Sueter, Rear-Admiral Sir M. F.


Emmett, C. E. G. C.
Markham, S. F.
Sutcliffe, H.


Emrys-Evans, P. V.
Marsden, Commander A.
Tasker, Sir R. I.


Entwistle, Sir C. F.
Maxwell, Hon. S. A
Tate, Mavis C.


Errington, E.
Mellor, Sir J. S. P. (Tamworth)
Taylor, Vice-Adm. E. A. (Padd., S.)


Erskine-Hill, A. G.
Mills, Sir F. (Leyton, E.)
Thomas, J. P. L.


Evans, Colonel A. (Cardiff, S.)
Mills, Major J. D. (New Forest)
Thorneycroft, G. E. P.


Everard, Sir William Lindsay
Moore, Lieut.-Col. Sir T. C. R.
Thornton-Kemsley, C. N.


Fildes, Sir H.
Moore-Brabazon, Lt.-Col. J. T. C.
Touche, G. C.


Fleming, E. L.
Morgan, R. H. (Worcester, Stourbridge)
Train, Sir J.


Fox, Sir G. W. G.
Morris-Jones, Sir Henry
Tryon, Major Rt. Hon. G. C


Fremantle, Sir F. E.
Morrison, G. A. (Scottish Univ's.)
Tufnell, Lieut.-Commander R. L.


Gilmour, Lt.-Cot. Rt. Hon. Sir J.
Munro, P.
Turton, R. H.


Gluckitein, L. H.
Neven-Spence, Major B. H. H.
Wakefield, W. W.


Goldie, N. B.
Nicholson, G. (Farnham)
Wallace, Capt. Rt. Hon. Euan


Graham, Captain A. C. (Wlrral)
Nicolson, Hon. H. G.
Ward, Lieut.-Col. Sir A. L. (Hull)


Grant-Ferris, Flight-Lieutenant R.
O'Connor, Sir Terence J.
Warrender, Sir V.


Granville, E. L.
O'Neill, Rt. Hon. Sir Hugh
Waterhouse, Captain C.


Grattan-Doyle, Sir N.
Orr-Ewing, I. L.
Wayland, Sir W. A.


Gridley, Sir A. B.
Palmer, G. E. H.
Wedderburn, H. J. S.


Grigg, Sir E. W. M.
Peake, O.
Wells, Sir Sydney


Gritten, W. G. Howard
Peat, C. U.
Whiteley, Major J. P. (Buckingham)


Gunston, Capt. Sir D. W.
Peters, Dr. S. J.
Williams, H. G. (Croydon, S.)


Hacking, Rt. Hon. Sir D. H.
Pilkington, R.
Willoughby de Eresby, Lord


Harbond, Sir A.
Ponsonby, Col. C. E.
Wilson, Lt.-Col. Sir A. T. (Hitchin)


Haslam, Henry (Horncastle)
Porritt, R. W.
Windsor-Clive, Lieut.-Colonel G.


Has lam, Sir J. (Botton)
Pownall, Lt.-Col. Sir Assheton
Winterton, Rt. Hon. Earl


Hely-Hutchison, M. R.
Procter, Major H. A.
Wise, A. R.


Henaage, Lieut.-Colonel A. P.
Radford, E. A.
Womersley, Sir W. J.


Hepburn, P. G. T. Buchan-
Raikes, H. V. A. M.
Wright, Wing-Commander J. A. C.


Hepworth, J.
Ramsay, Captain A. H. M.
York, C.


Higgs, W. F.
Rawon, Sir Cooper
Young, A. s. L. (Partisk)


Holdsworth, H.
Reed, Sir H. S. (Aylesbury)



Hore-Belisha, Rt. Hon. L.
Renter, J. R.
TELLERS FOR THE NOES.—


Howitt, Dr. A. B.
Rickards, G. W. (Skipton)
Mr. Grimston and Lieut.-Colonel


Hudson, Capt. A. U. M. (Hack., N.)
Ropner, Colonel L.
Harvie Watt.

NEW CLAUSE.—(Deduction in respect of dependent and infirm relatives.)

Subsection (1) of Section twenty-two of the Finance Act, 1920 (which provides for deductions in respect of dependent relatives) shall have effect as if in the case of 'persons incapacitated by blindness the words "fifty pounds." were substituted for "twenty-five pounds."—[Mr. White.]

Brought up, and read the First time.

4.50 p.m.

Mr. White: I beg to move, "That the Clause be read a Second time."
This Clause proposes to extend the deduction in the case of persons incapacitated by blindness, and for that reason it must arouse the sympathy of every hon. Member present. The Clause really explains itself, but I may convey a fuller meaning of its purpose by reading a letter I have received from a correspondent who has a blind son. He writes:
I will take my own case in order to show what I mean. Our eldest son, now over 40 years of age, has been blind since he was twp weeks old. We had him under the best


of specialists for 11 years. He has always to have someone to look afterhim, and cannot be left by himself For him I can only claim £25 as the law stands. I certainly consider—
and here I may interpolate that everybody here will consider, too—
that all dependants should be allowed at least the same as a child. Would you be good enough … to raise this matter in the House
The subject of this Clause has been in the minds of myself and other Members from time to time, and we consider it is a case in which justice will be met if the increased deduction is allowed.

4.52 p.m.

Mr. Kingsley Griffith: I beg to second the Motion.
I know it is customary for the Chancellor of the Exchequer, or anyone representing the Treasury on an occasion like this, to say that he has the greatest sympathy with the Motion, but that if he accepted it, it would open the door to many similar claims. I do not think that should be said with regard to this case, because blindness has always been regarded with particular tenderness and it has always been realised that persons so afflicted have a claim on our attention greater perhaps than that of anyone else.

4.53 p.m.

The Financial Secretary to the Treasury (Captain Crookshank): The hon. Gentleman who has just spoken has almost taken my own words out of my own mouth. He expects the answer that we have great sympathy with the blind, but that if we do anything we shall open the door to other claims. His reason for thinking that the answer might be on those lines is, no doubt, that the matter was debated in Committee on another Amendment. It was then proposed that there should be an increased personal allowance for the totally blind. The arguments then adduced are not very different from those which will be brought forward to-day. The proposal in this new Clause is to double the normal allowance for dependent relatives if they are blind. Let me remind the House what the position is with regard to these allowances. A person who maintains a relative, of himself or his wife, who is incapacitated by old age or infirmity from maintaining himself or herself, is entitled to an allowance of £25 provided that the

relative's total income does not exceed£50. There is inevitably bound to be a certain pathos when one is dealing with any aspect of total blindness. We are all at one about that. But it is, unfortunately, not the only infirmity from which people suffer who are unable to maintain themselves, and the short answer really is that the Income Tax laws cannot easily be made to reflect all the personal or domestic circumstances of various categories of taxpayers.
The whole principle of the structure of those laws is that allowances are related to matters which are so general that some uniform measure can be adopted for them. Personal allowances take account of subsistence charges, and expenses for family responsibilities cover infirm persons and children and dependent relatives. It is difficult to see how you can vary that type of allowance for particular cases, or how, from the point of view of the Income Tax laws—and I am not speaking from any other point of view—you can distinguish a person incapacitated by blindness and say that his is a harder case than that of someone bedridden, or suffering from incurable disease, or totally crippled for life. One comes into a range of disabilities in which it is difficult to pick and choose and say that one is harder than another. If the hon. Member will look up the Official Report for 3rd July, he will see that when my right hon. Friend was answering a case from this side of the House he quoted from the Royal Commission on Income Tax, which pointed out the different claims that have been made to them and the difficulty they felt in recommending any way in which they could be dealt with. During the Debates this year we have already had the case of blind people, and there was also an Amendment on the Order Paper dealing with the expenses of taxpayers in connection with disability. I know that hon. Members feel there is some difficulty in many of these cases, but the answer, generally speaking, is the same to all—that unless you are going to change entirely the whole principle on which Income Tax allowances have been based, it is impossible to single out one category of infirmity and leave others untouched. For that reason, and because the present matter has already been debated during the passage of the Finance Bill, I hope the House will reject this new Clause.

Mr. Ernest Evans: Will the right hon. Gentleman tell us how many people would be affected by this Clause, and what the cost would be?

Captain Crookshank: I do not know the answer, but I am not basing my opposition on the ground of cost. I hope I have made it clear that it is on the ground of the general principle of the Income Tax Law.

4.59 p.m.

Mr. J. J. Davidson: We on this side, and many hon. Members opposite who have great sympathy with blind people, are bitterly disappointed at the reply of the Financial Secretary. We have raised repeatedly questions concerning people who belong to the most unfortunate section of the community, the blind, the infirm or the very poor, and on every occasion the right hon. Gentleman has made the same reply—that this would involve a change of principle. In this case it would do nothing of the kind, because the investigations that can take place under the Income Tax law—and I am sure the hon. Member for East Birkenhead (Mr. White) would welcome even an indication from the Government that they would institute an inquiry into the position of blind dependants—would clear up the position in regard to blind dependants. We have had strong vested interests not making appeals but making very definite demands. We have had industrial employers represented here putting forward claims with regard to the limitation of their profits and the percentage of profits that they may be

allowed, and we have had strong opposition from the other side against any attempt to reduce the amount of wealth that those strong vested interests can obtain.

It is time that the Chancellor of the Exchequer and the Financial Secretary turned to the position of what popular government should mean and dealt with those who need rebates and reductions and allowances before they deal with those who are at least comfortable, and many of whom are in good positions and living in very great wealth. Local authorities all over the country are making extensive allowances to blind people. In Glasgow, the second city of the Empire, Government pensions to blind persons amount roughly to £376,000 a year, but the local authorities themselves are paying more than £380,000 in addition. Blindness has always been recognised as a terrible infirmity, almost the worst that any man or woman can suffer. It is disgraceful that on this Bill we have made concessions of millions of pounds to vested interests while the cost of this concession that we are asking would be infinitesimal. I make a last appeal to the Financial Secretary, if he cannot guarantee that something can be done this year, to ask his right hon. Friend to set up an investigation to inquire fully into the circumstances of blind dependants with a view to bringing some betterment into their conditions of life.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 131; Noes, 217.

Division No. 231.]
AYES.
5.6 p.m.


Adams, D. (Consett)
Cripps, Hon. Sir Stafford
Groves, T. E.


Adams, D. M. (Poplar, S.)
Daggar, G.
Hall, G. H. (Aberdare)


Adamson, W. M.
Davidson, J. J. (Maryhill)
Hall, J. H. (Whitechapel)


Alexander, Rt. Hon. A. V. (H'lsbr.)
Davies, R. J. (Westhoughton)
Hardie, Agnes


Ammon, C. G.
Day, H.
Harris, Sir P. A.


Anderson, F. (Whitehaven)
Dobbie, W.
Harvey, T. E. (Eng. Univ's.)


Banfield, J. W.
Dunn, E. (Rother Valley)
Henderson, A. (Kingswinford)


Barnes, A. J.
Ede, J. C.
Henderson, J. (Ardwick)


Barr, J.
Edwards, A. (Middlesbrough E.)
Henderson, T. (Tradeston)


Bartlett, C. V. O.
Edwards, Sir C. (Bedwellty)
Hills, A. (Pontefract)


Batey, J.
Edwards, N. (Caerphilly)
Hollins, A.


Beaumont, H. (Bailey)
Fletcher, Lt.-Comdr. R. T. H.
Hopkin, D.


Bellenger, F. J.
Foot, D. M.
Jagger, J.


Benson, G.
Gallacher, W.
Jenkins, A. (Pontypool)


Bevan, A.
Gardner, B. W.
Jenkins, Sir W. (Neath)


Brown, C. (Mansfield)
Garro Jones, G. M.
John, W.


Buchanan, G.
George, Major G. Lloyd (Pembroke)
Johnston, Rt. Hon. T.


Burke, W. A.
Gibson. R. (Greenock)
Jones, Sir H. Haydn (Merioneth)


Cape, T.
Green, W. H. (Deptford)
Kennedy, Rt. Hon. T.


Charleton, H. C.
Greenwood, Rt. Hon. A.
Kirkwood, D.


Cluse, W. S.
Grenfell, D. R.
Lawson, J. J.


Clynes, Rt. Hon. J. R.
Griffith, F. Kingsley (M'ddl'sbro, W.)
Leach, W. 


Collindridge, F.
Griffiths, G. A. (Hemsworth)
Lee, F.


Cove, W. G.
Griffiths, J. (Llanelly)
Leonard, W.




Leslie, J. R.
Pethick-Lawrence, Rt. Hon. F. W.
Taylor, R. J. (Morpeth)


Logan, D. G.
Price, M. P.
Thorne, W.


Lunn, W.
Richards, R. (Wrexham)
Tinker, J. J.


Macdonald, G. (Ince)
Ridley, G
Tomlinson, G.


McEntee, V. La T.
Ritson, J.
Viant, S. P.


McGhee, H. G.
Robinson, W. A. (St. Helens)
Walker, J.


McGovern, J.
Sanders, W. S.
Watkins, F. C.


MacLaren, A.
Seely, Sir H. M.
Wedgwood, Rt. Hon. J. C.


Maclean, N.
Sexton, T. M.
Welsh, J. C.


Mainwaring, W. H.
Shinwell, E.
Westwood, J.


Marshall, F.
Silkin, L.
Whiteley, W. (Blaydon)


Mathers, G.
Silverman, S. S.
Wilkinson, Ellen


Maxton, J
Simpson, F. B.
Williams, E. J. (Ogmore)


Montague, F.
Smith, Ben (Rotherhithe)
Wilmot, John


Morrison, R. C. (Tottenham, N.)
Smith, E. (Stoke)
Wilson, C. H. (Attercliffe)


Naylor, T. E.
Smith, Rt. Hon. H. B. Lees- (K'ly)
Windsor, W. (Hull, C.)


Noel-Baker, P. J.
Sorensen, R. W.
Woods, G. S. (Finsbury)


Owen, Major G.
Stephen, C



Paling, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)
TELLERS FOR THE AYES.—


Parkinson, J. A.
Stokes, R. R.
Mr. Graham White and Mr. Ernest Evans.


Pearson, A.
Straust, G. R. (Lambeth. N.)





NOES.


Acland-Troyte, Lt.-Col. G. J.
Culverwell, C. T.
MacAndrew, Colonel Sir C. G.


Adams, S. V. T. (Leeds, W.)
Davidson, Viscountess
McCorquodale, M. S.


Albery, Sir Irving
Davies, C. (Montgomery)
McEwen, Capt. J. H. F.


Allen, Col. J. Sandeman (B'knhead)
De Chair, S. S.
McKie, J. H.


Anderson, Sir A, Garrett (C, of Ldn.)
De la Bère, R.
Macnamara, Lt.-Col. J, R. J.


Anderson, Rt. Hn. Sir J. (So'h Univ't)
Denman, Hon. R. D
Magnay, T.


Anstruther Gray, W. J.
Denville, Alfred
Maitland, Sir Adam


Aske, Sir Ft. W.
Doland, G. F.
Makins, Brigadier-General Sir Ernest


Assheton, R.
Duggan, H. J.
Manningham-Buller, Sir M.


Baillie, Sir A. W. M.
Duncan, J, A. L-
Margesson, Capt. Rt. Hon. H. D. R


Baldwin-Webb, Col. J.
Edge, Sir W.
Markham, S. F.


Balniel, Lord
Edmondson, Major Sir J.
Marsden, Commander A.


Barrie, Sir C. C.
Ellis, Sir G.
Mason, Lt.-Col. Hon. G. K. M.


Baxter, A. Bevertey
Emmott, C. E. G. C.
Maxwell, Hon. S. A.


Beamish, Rear-Admiral T. P. H.
Emrys-Evans, P. V.
Meller, Sir R. J. (Mitcham)


Beaumont, Hon. R. E. B. (Portsm'h)
Erskine-Hill, A. G.
Mellor, Sir J. S. P. (Tamworth)


Beit, Sir A. L.
Evans, Colonel A. (Cardiff, S.)
Mills, Sir F. (Leyton, E.)


Bennett, Sir E. N.
Everard, Sir William Lindsay
Mills, Major J. D. (New Forest)


Blair, Sir R.
Fildes, Sir H.
Moore-Brabazon, Lt.-Col. J. T. C.


Boothby, R. J. G.
Fleming, E. L.
Morgan, R. H. (Worcester, Stourbridge)


Bossom, A. C.
Fox, Sir G. W. G.
Morris-Jones, Sir Henry


Boulton, W. W.
Gilmour, Lt.-Col. Rt. Hon. Sir J.
Morrison, G. A. (Scottish Univ's.)


Boyce, H. Leslie
Gluckstein, L. H.
Munro, P.


Braithwaite, Major A. N. (Buckrose)
Goldie, N. B.
Neven-Spence, Major B. H. H.


Brass, Sir W.
Graham, Captain A. C. (Wirral)
Nicholson, G. (Farnham)


Broadbridge, Sir G. T.
Grant-Ferris, Flight-Lieutenant R.
Nicolson, Hon. H. G.


Brooklebank, Sir Edmund
Granville, E. L.
O'Connor, Sir Terence J.


Brooke, H. (Lewisham, W.)
Grattan-Doyle, Sir N.
O'Neill, Rt. Hon. Sir Hugh


Brown, Rt. Hon. E. (Leith)
Gridley, Sir A. B.
Orr-Ewing, I. L.


Bullock, Capt. M.
Grimston, R. V.
Peat, C. U.


Burgin, Rt. Hon. E. L
Gritten, W. G. Howard
Pickthorn, K. W. M.


Butcher, H. W.
Gunston, Capt. Sir D. W.
Pilkington, R.


Cartland, J. R. H.
Hacking, Rt. Hon. Sir D. H.
Porritt, R. W.


Carver, Major W. H.
Harbord, Sir A.
Pownall, Lt.-Col. Sir Assheton


Gary, R. A.
Haslam, Henry (Horncastle)
Procter, Major H. A.


Cayzer, Sir C. W. (City of Chester)
Haslam, Sir J. (Bolton)
Radford, E. A.


Cazalet, Thelma (Islington. E.)
Hely-Hutchinson, M. R.
Raikes, H. V. A. M.


Cazalet, Capt. V. A. (Chippenham)
Hepworth, J.
Ramsay, Captain A. H. M


Chamberlain, Rt. Hn. N. (Edgb't'n)
Higgs, W. F.
Rawson, Sir Cooper


Channon, H.
Holdsworth, H.
Reed, Sir H. S. (Aylesbury)


Chapman, A. (Rutherglen)
Holmes, J. S.
Remer, J. R.


Chapman, Sir S. (Edinburgh, S.)
Hore-Belisha, Rt. Hon. L.
Rickards, G. W. (Skipton)


Christie, J. A.
Howitt, Dr. A. B.
Ropner, Colonel L.


Clarke, Colonel R. S. (E. Grinstead)
Hudson, Capt. A. U. M. (Hack., N.)
Rosbotham, Sir T.


Clarry, Sir Reginald
Hunloke, H. P.
Ross Taylor, W. (Wood bridge)


Clydesdale, Marquess of
Hunter, T.
Rowlands, G.


Cobb, Captain E. C. (Preston)
Jones, L. (Swansea W.)
Royds, Admiral Sir P. M. R.


Colfox, Major Sir W. P.
Keeling, E. H.
Russell, Sir Alexander


Conant, Captain R. J. E.
Kerr, Colonel C.I. (Montrose)
Russell, S. H. M. (Darwen)


Colville, Rt. Hon. John
Kerr, H. W. (Oldham)
Salmon, Sir I.


Conant, Captain R. J. E.
Kerr, Sir John Graham (Sco'sh Univs.)
Salt, E. W.


Cook, Sir T. R. A. M. (Norfolk, N.)
Kimball, L.
Samuel, M. R. A.


Cooke, J. D. (Hammersmith, S.)
Leech, Sir J. W.
Sandeman, Sir N. S.


Cooper, Rt. Hon. A. Duff (W'st'r S. G'gs)
Lennox-Boyd, A. T. L.
Sanderson, Sir F. B.


Courthope Col. Rt. Hon. Sir G. L.
Levy, T.
Schuster, Sir G. E.


Crooks, Sir J. Smedley
Liddall, W. S.
Selley, H. R.


Crookshank, Capt. Rt. Hon. H. F. C.
Lipson, D. L.
Shaw, Captain W T. (Forfar)


Cross, R. H.
Llewellin, Colonel J. J.
Shepperson, Sir E. W.


Crossley, A. C.
Locker-Lampson, Comdr. o. S.
Shute, Colonel Sir J. J.


Crowder, J. F. E.
Loftus, P. C.
Simon, Rt. Hon. Sir J. A.







Smith, Bracewell (Dulwich)
Tate, Mavis C.
Wayland, Sir W. A.


Smith, Sir R. W. (Aberdeen)
Taylor, Vice-Adm. E. A. (Padd., S.)
Wells, Sir Sydney


Smithers, Sir W.
Thomas, J. P. I.
Whiteley, Major J. P. (Buckingham)


Somerville, Sir A. A. (Windsor)
Thorneycroft, G. E. P.
Williams, Sir H. G. (Croydon, S.)


Southby, Commander Sir A. R. J.
Thornton-Kemsley, C. N.
Willoughby de Eresby, Lord


Spears, Brigadier-General E. L.
Touche, G. C.
Windsor-Clive, Lieut.-Colonel G.


Spens, W. P.
Train, Sir J.
Wise, A. R.


Stanley, Fit. Hon. Oliver (W'm'ld)
Tryon, Major Rt. Hon. G. C.
Womersley, Sir W. J.


Stourton, Major Hon. J. J
Tufnell, Lieut.-Commander R. L.
Wright, Wing-Commander J. A. C.


Strauss, H. G. (Norwich)
Wakefield, W. W.
Young, A. S. L. (Partick)


Strickland, Captain W. F.
Wallace, Capt. Rt. Hon. Euan



Stuart, Hon. J. (Moray and Nairn)
Ward, Lieut.-Col. Sir A. L. (Hull)
TELLERS FOR THE NOES.— 


Sueter, Rear-Admiral Sir M. F.
Warrander, Sir V.
Mr. Buchan-Hepburn and Lieut.-


Tasker, Sir R. I.
Waterhouse, Captain C.
Colonel Harvie Watt.

NEW CLAUSE (Provision as to licence in respect of a mechanically-propelled vehicle.)

(1) Notwithstanding anything in Sub section (2) of Section thirteen of the Finance Act, 1920, a licence in respect of any mechanically-propelled vehicle taken out at any period of the year may, at the option of the applicant on payment of the full duty, be valid for the ensuing twelve months.

(2) This Section shall come into operation on the first day of January, nineteen hundred and forty.—[Mr. Pethick-Lawrence.]

Brought up, and read the First time.

5.13 p.m.

Mr. Pethick-Lawrence: I beg to move, "That the Clause be read a Second time."
This Clause is peculiar in this respect, that, though I am proposing to add it to the Finance Bill, there is very little finance in it either from the point of view of the Chancellor of the Exchequer or of the taxpayer. Its specific object is to enable a year's licence for a motor car to be taken out at any period of the year. According to the present law the only date on which a year's licence can be taken out is 1st January. A quarter's licence can be taken out on 1st January, 1st April, 1st July or 1st October. With the exception of those arrangements there is no other possibility for a person who owns a motor car.
Let us see what the consequences of this are, because I do not think the Chancellor has ever grasped the great inconvenience that the present system causes both to the public and to the trade. A man orders a car. He does not know the exact date on which it will be delivered. It depends on a great many circumstances over which neither he nor the retail agent has any control. It is ready perhaps somewhere in November, and the potential owner of the car has two alternatives. He can either take out a quarter's licence for the half of the quarter which is left, or he can postpone

taking possession of the car until 1st January. But it is not only the new car that is in question, because the man who is buying the new car very likely has another car which he is going to give in exchange for it. If he postpones taking possession of the new car until 1st January, and he wants to have a car to drive all the time, the secondhand car which he will give in part exchange has also to be transferred on 1st January. In turn, his secondhand car is probably going to be taken over by a man who has another car to exchange.
Therefore, a whole succession of orders is involved in the change of ownership on 1st January. This causes great inconvenience to the owner of the car. It means that he has to pay for the broken period a whole quarter's licence or he has to wait until 1st January. To the trade it creates almost confusion, because I am informed that in some cases they have an enormous number of cars which have to be housed in the last few days of the year in order that this immense migration shall take place precisely on 1st January. In other words, the present law works out rather on the plan of the old saying, "When father says 'Turn,' we all turn." When the Chancellor says that 1st January is the date on which the licence has to be taken out, the whole motor trade turns over, and all the car owners turn over, on that particular date. That does not exhaust the difficulties which are involved by this process. There are also the licensing authorities to be taken into account. The licensing authorities, instead of having the work of licensing the various cars spread over the whole calendar year, have to compress nearly all their licensing— all the yearly licensing, anyhow—into a very few days, and as a result very high pressure of work, considerable inconvenience, and in some cases a measure of delay are caused.
What is the ground on which this extraordinary state of affairs continues? I


suppose it is a certain difficulty that is alleged with regard to administration. It is suggested that the present law has this one great advantage, that there is a special licence which is issued on 1st January, and the police can see at a glance whether or not the car owner has taken out a licence for that particular year—the 1939 licence, the 1940 licence, and so on. I can see a certain amount of advantage in that, but I cannot believe that that difficulty is insuperable. Even at the present time there are quarterly licences taken out which involve a different type of licence, and the actual cardboard or form of the licence has to be examined to see exactly what it is. I cannot imagine that there would be any difficulty, either, in seeing that the date shall appear up to which the licence continues and after which it expires. But supposing there is the difficulty which we have been told in accepting the Amendment as I have moved it, namely, that a licence can be taken out from any day in the calendar year, I should be willing to accept an Amendment of my Amendment to the effect that, instead of being any day in the calendar year, it should be any first day of the month in the calendar year.

Mr. Duncan: That is the case at present. I did it myself last year. I bought a car on 1st December and got a licence for one month, from 1st December to 31st December, so that the right hon. Gentleman is suggesting what is the actual practice now.

Mr. Pethick-Lawrence: I am not suggesting what the hon. Member says at all. What I am suggesting is that the car owner shall be able to take out a 12-months' licence on the first day of any calendar month. I would prefer him to be able to take it out on any day of the month, but if we are told that there are difficulties involved, I am willing to accept the first day of any month. There are various devices which could be adopted to enable this to be done. After all, charitable organisations and newspapers which have subscribers have to carry out this method of being able to check subscriptions which run out on a certain date, and I do not think there would be any overwhelming difficulty in the Revenue authorities having to do something of that kind. I said at the

beginning of my speech that this was a matter which I thought had little or nothing of finance in it, from the Chancellor's point of view. He might lose a little in one way, because, as I have already explained, people who want to take out a licence somewhere in the middle of a quarter, under the present law are compelled to take it out for the whole quarter. In some cases, it is said, they may take it out for a month.

The Parliamentary Secretary to the Ministry of Transport (Captain Austin Hudson): They may get a rebate.

Mr. Pethick-Lawrence: In any case the Chancellor of the Exchequer may make a slight loss by the removal of the present inconvenience. On the other hand, I think he might equally make a gain, because there are some people who would delay taking out their licence who, if this change in the law were made, would take it out and start driving their new car say, in the middle of November or December instead of waiting till 1st January, and in that way the Chancellor would make a gain on the transaction. But over and above all that, I believe that where there is no large amount of revenue concerned, it must be to the advantage of the Chancellor of the Exchequer in the long run to convenience the public, whereas the present precise method of collecting this tax seems to me to create the maximum of inconvenience, and I can see no advantage in continuing it. If we are to be told that the reason is financial, I believe that that can be swept away, I would almost say, as a quibble. If we are told that the difficulty is administrative, I believe that that can equally be overcome. I suggest to the Chancellor that by bringing in his new horse power tax, he has given a great deal of annoyance, not only to motorists, but to the trade. He has told us that he cannot help it, that he has to get his revenue, and that he must impose the tax in this particular form, a view which many of us have not shared, but at the same time I suppose it is past remedying to-day. But here is a small matter, an Amendment which I believe he should accept, which would give some little consolation to the motorists and which would be welcomed by the trade. I commend it to his consideration as something which would be of advantage, which would cost him nothing, or next to nothing, and which could


be made to work if he and the Minister of Transport set their minds to the job.

5.27 p.m.

Lieut.-Colonel Moore-Brabazon: My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) has, in moving his new Clause, shown ingenuity. There is something to be said for the fact that at present one cannot wed up a licence to the nearest quarter. What he proposes is that on any day of the year we should be able to take out a yearly licence, and that would be a convenience, but that is for the Chancellor of the Exchequer to decide. If, however, one could, on any day of the month, wed the time up to the end of the quarter, I think that would be a convenience which would very nearly fill the bill. I see a certain danger in the suggestion. One might use the idea as an insurance policy against future taxation. Nowadays, when we do not know what the horse power tax will be, and when we do not know what the formula is to be, it might indeed be very tempting to take your licence out one day before the Budget, so that in that way you would know where you would be for the year.
I think the Chancellor of the Exchequer wants to appreciate this point, which has, I believe, never yet been brought out, that he stands in a very vulnerable position with the present quarterly taxation. After all, most of the motorists pay on a yearly basis, on 1st January. If you had a concerted conspiracy of disgruntled motorists—and I cannot help saying that that state has nearly arrived several times—they might all conspire to pay, not a yearly licence, but only a quarterly licence, which they are all entitled to do, starting from 1st January, which would result in a deficit for one year of something over £10,000,000 on the right hon. Gentleman's Budget. That is a danger which he has to realise could occur on the present basis. Whether he is prepared to go further, as my right hon. Friend suggests, is for him to decide, but there are perils in the position of the tax even to-day.

5.30 p.m.

Captain Sir William Brass: I want to look at this matter from a rather different angle. I feel that there is a great deal of justification in the case which has been

made by the right hon. Member for East Edinburgh (Mr. Pethick - Lawrence). During previous Debates on the subject I discussed the psychological effect of the increased horse-power tax which comes into force on 1st January, and I feel that if the suggestion of the right hon. Gentleman opposite is brought into operation the Chancellor will actually gain. Anybody proposing to buy a new motor car assesses how much the car will cost him and also, probably, how much he is going to pay in taxation on it for the year, and when he has accumulated enough money to pay for the car and the tax he probably buys it. If he were able to do what the right hon. Gentleman suggests he would probably buy his new car in the summer, when most people do buy cars, and pay the whole year's tax, and would not then feel worried by the thought that on 1st January, when all the bills come in, he would have his car tax to pay. He would be able to carry on until the next summer, by which time he would probably have been able to accumulate enough money to pay the tax again; certainly he would desire to do so, because it would be the summer.
I feel there is something in what the right hon. Gentleman said and I hope that my right hon. Friend the Chancellor will consider it. After all, a driving licence can expire at any time in the year, and one is reminded—after considerable agitation by various Members in this House, including myself—when its renewal is due. There is no reason why the same principle should not be adopted in the case of the tax on the car itself. In looking at this matter the Chancellor ought to bear in mind the bomb-shell which hits everybody on 1st January. Motorists should be allowed to take out a whole year's licence whenever they buy the car, instead of taking it out only quarter by quarter or till the end of the year, as is the case at present.

5.33 P.m.

Mr. Duncan: The present position of the law, as I understand it, is that a motorist can take out either a yearly or a quarterly licence, or can take out a two-monthly licence to the end of a quarter or a one-monthly licence to the end of a quarter, so that a very large part of the grievance of the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) has, I think, been met


as far as part-yearly licences are concerned. He went on to the suggestion in his new Clause to make a yearly licence last for 12 months from any date on which it is taken out. My first objection to that proposal is that there would be 365 licence dates in the year, and though the right hon. Gentleman did say that the licence date might be confined to the first day of every month I think the motorist would be worse off in the end. If a motorist were enabled to take out a licence on 1st December to last for the next 12 months he would have a pink licence for 1939 displayed on his wind-screen, whereas a man who took out his licence on 1st January would probably have a green licence for 1940 displayed on his windscreen. The police, instead of being able to see by the difference in colour when the licence expired would have to stop every motorist in order to inspect the actual date upon the licence. Therefore, from the point of view of the motorist it would be an unwise change to make; and it would add enormously to the difficulties of the police in enforcing the law. It would probably mean an increase in the cost of police administration, at any rate, in county districts

5.35 P.m.

Captain Hudson: When I first saw this new Clause I had some difficulty in discovering its object, and I think it has been obvious from the Debate that hon. Members are not fully seized of the various ways in which licences can be taken out. If the new Clause were adopted it would cause the maximum of administrative difficulty with the minimum of advantage to the holders of the licences. A short while ago we had to resist a proposal to have monthly licences on the ground that 12 expiry dates would make it almost impossible for the police to keep a check on expired licences. As my hon. Friend the Member for North Kensington (Mr. Duncan) said, we now have only four expiry dates, the ends of the four quarters, and every licence comes to an end on 31st December. The way the police keep a check on the licences of motor vehicles is by means of a visual check. They have to know the different colours of the licences which expire on those four dates. If this Amendment were taken literally there would be not only four expiry dates but 365. The right hon. Gentleman said he would be prepared to alter his new Clause in order

that the expiry date should always be at the end of a month, but even then we should have exactly the same position as in the case of the monthly licence, that is, no fewer than 12 expiry dates. When the tax was put up we considered very carefully whether anything could be done to meet the case of what is called the small man, by allowing him to take out his licence for a month, but we found that proposal was impossible. This new Clause does not affect such a man in the least. It simply concerns the man who can take out a licence for the year. The small man who finds difficulty in paying the whole licence for the year in one sum is not helped in any way.

Mr. Silverman: The hon. and gallant Member referred to 365 expiry dates. There are 365 expiry dates for driving licences and 365 expiry dates for insurance policies, and it is no more important that a motorist should pay his road tax than that he should be properly licensed and insured. Why would it be more in-convenient to have 365 expiry dates for the road tax than 365 expiry dates in the other case?

Captain Hudson: I tried to explain that. Insurance certificates or driving licences do not have to be exposed on the vehicle. But the way the police check up on these road licences is by means of the visual discs. If we had a completely different system the argument might be valid, but that is the present system, and it works well, with a minimum of inconvenience. It is not necessary, as some hon. Members seem to think, to pay a whole quarter's licence. Supposing a man buys a new car in November, he can obtain a new licence for two months or in December for one month. Provided he pays from the beginning of a month he can take out his licence on any date and it can end at the end of a quarter or at the end of the year. I do not think the Chancellor need be unduly worried about the proposed strike, if I may so call it, referred to by my hon. and gallant Friend the Member for Wallasey (Lieut.-Colonel Moore-Brabazon) because if motorists all took out quarterly licences on 1st January next they would have to pay an additional 10 per cent. They might feel that was a good thing to do in order to annoy the Chancellor, but they would be cutting off their noses to spite their faces and I do not think they will be likely to do it.


Further, if this new Clause were passed there would be the difficulty of arranging for any possible Budgetary alteration. At present the Chancellor knows that on 1st January all licences, quarterly, half-yearly or yearly, come to an end, and I believe that certain Members of this House hope that before very long the duty may be reduced again. If the Chancellor wants to make an alteration he can at present do so on 1st January, but it would be extremely difficult to do it if all these licences came to an end at different times.
The right hon. Gentleman who moved the Clause said he thought it would cost the revenue practically nothing, but that is not so. In the first complete financial year it would be liable to cost the Chancellor something. Supposing I were to take out a licence now, in July. I should have to take it out from 1st July and it could end on 31st December, and on 1st January I should again take out a licence, and if I were a person who takes out a whole year's licence I should take out the licence for a further 12 months, making 18 months in all; but if this new Clause were in operation my licence would run from 1st July last to 30th June next, and in that way the Chancellor would lose a certain amount of revenue in the first financial year. I ask the House to reject the Clause, not on that ground, but on the ground of the practical impossibility of administration. I do not believe it would be of great advantage to motorists, and I do know that the administrative difficulties of having at least 12 expiry dates would make it practically impossible for a proper check to be kept upon expired licences.

5.42 p.m.

Mr. Ede: The hon. and gallant Member has not convinced me of the administrative inconvenience of this proposed change. He slurred over the inconvenience which now falls upon those who have to collect this money for him. All the big county councils and county borough councils are placed in this difficulty, that in the first fortnight or three weeks of a new year they have to take on a substantial number of temporary clerks in order to cope with the work of issuing these licences. It is true that the hon. and gallant Member's Department or the Excise authorities pay for them, but there is the administrative difficulty of having

in the office a number of temporary workers handling substantial sums of money and dealing with matters of this kind, and that point ought to be taken into consideration. The proposal that the licence could be taken out on any day, or taken out at the commencement of each month, would spread the work more evenly over the year, and there could be permanent servants in charge of it, who would do the work more efficiently and whose employment would be more satisfactory to all concerned.
The hon. Member for Nelson and Colne (Mr. Silverman) pointed out that the Department do not worry over the fact that an insurance policy can expire on any day, and the hon. and gallant Member said that was because the motorist does not have to show his insurance policy on the car. I think it is more important that a motorist should show his insurance policy than that he should show his road licence. On financial grounds the Chancellor may not agree with that view, but it would be of more benefit to the people of this country to be assured that the driver was insured than that they should be assured that he had paid his licence. In spite of the law every magistrate from time to time finds in front of him some man of straw who has been driving with most disastrous results to the life and limb of other road users and has no insurance policy. When the police do not want to do anything no one is more ingenious than they in proving that it cannot be done. I recollect how for many years they said that it was impossible for policemen to wear white armlets. I have heard Home Secretaries explain to us in this House that it was impossible for a policeman on traffic duty to wear a white armlet, that the discipline of the force would disappear, the clothing bill would be considerably augmented and that the whole thing was fantastic and impossible. It has been done, and, as far as I know, without any disastrous results to the Police Force. I imagine that a few police-men are alive to-day because they have been wearing white armlets which they would not have worn if the reform had never been made.
The police are good judges of colour, and I cannot see why you could not have a circular card, like the one that you have at the moment, but divided into 12 sectors with two colours. If the licence


were taken out on 1st November, two sectors should be in the colour for that year and the remaining 10 sectors in the colour for the next year. That is a very simple way of doing it, and if the police wanted to do it, as a way of identifying, for example, the car owned by my hon. Friend the Member for West Fife (Mr. Gallacher), or in some way to identify a particular group of cars, the system would present no difficulty. It would be a substantial convenience to the motorist and to those administrative bodies upon whom the Chancellor of the Exchequer imposes the duty of collecting the licence. One of my right hon. Friends adds that it would also be of considerable convenience to the

trade. I hope that the right hon. Gentleman will not close his mind to this idea. Clearly, there is more to be said for it than has been disposed of by the speech of the hon. and gallant Gentleman, who has evidently been inspired mainly by the police in their more conservative moments. I sincerely hope that next year the right hon. Gentleman will be able to meet the point of view put forward by my right hon. Friend.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 121; Noes, 249.

Division No. 232.]
AYES.
[5.49 p.m.


Adams, D. (Consett)
Groves, T. E.
Pethick-Lawrence, Rt. Hon. F. W.


Adams, D. M. (Poplar, S.)
Hall, G. H. (Aberdare)
Prim, M. P.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Hall, J. H. (Whitechapel)
Richards, R. (Wrexham)


Ammon, C. G.
Hardie, Agnes
Ridley, G


Anderson, F. (Whitehaven)
Henderson, A. (Kingswinford)
Riley, B.


Banfield, J. W.
Henderson, J. (Ardwick)
Ritson, J.


Barnes, A. J.
Henderson, T. (Tradeston)
Robinson, W. A. (St. Helens)


Barr, J.
Hills, A. (Pontefract)
Sanders, W. S.


Batey, J.
Hollins, A.
Sexton, T. M.


Beaumont, H. (Batley)
Hopkin, D.
Shinwell, E.


Bellenger, F, J.
Jenkins, A. (Pontypool)
Silkin, L.


Benson, G.
Jenkins, Sir W, (Neath)
Silverman, S. S


Bevan, A.
John, W.
Simpson, F. B.


Broad, F. A.
Johnston, Rt. Hon. T.
Smith, Bon (Rotherhithe)


Brown, C. (Mansfield)
Jones, A. C. (Shipley)
Smith, E. (Stoke)


Buchanan, G.
Kennedy, Rt. Hon. T.
Smith, Rt. Hon. H. B. Lees- (K'ly)


Burke, W. A.
Kirkwood, D.
Smith, T. (Normanton)


Cope, T.
Lawson, J. J.
Sorensen, R. W.


Charleton, H. C.
Leach, W.
Stephen, C.


Cluse, w. S.
Lee, F.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Clynes, R. Hon. J. R.
Leonard, W.
Stokes, R. R.


Collindridge, F.
Leslie, J. R.
Strauss, G. R. (Lambeth, N.)


Cove, W. G.
Logan, D. G.
Taylor, R. J. (Morpeth) 


Dagger, G.
Leach, W.
Thorne, W.


Dalton, H.
Macdonald, G. (Ince)
Tinker, J. J.


Dobbie, W.
McEntee, V. La T.
Tomlinson, G.


Dunn, E. (Rother Valley)
McGhee, H. G.
Viant, S. P.


Ede, J. C.
McGovern, J.
Watkins, F. C.


Edwards, A. (Middlesbrough E.)
MacLaren, A.
Watson, W. McL.


Edwards, Sir C. (Bedwelty)
Maclean, N.
Wedgwood, Rt. Hon. J. C.


Edwards, N. (Caerphilly)
Mainwaring, W. H.
Walsh, J. C.


Fletcher, Lt.-Comdr. R. T. H.
Marshall, F.
Westwood, J.


Gallacher, W.
Maxton, J
Whitelay, W. (Blaydon)


Gardner, B. W.
Montague, F.
Williams, E. J. (Ogmore)


Garro Jones, G. M.
Morgan, J (York, W.R., Doncaster)
Williams, T. (Don Valley)


Gibson, R. (Greenock)
Morrison, R. C. (Tottenham, N.)
Wilmot, John


Green, W. H. (Deptford)
Naylor, T. E.
Wilson, C. H. (Attercliffe)


Greenwood, Rt. Hon. A.
Noel-Baker, P. J.
Windsor, W. (Hull, C.)


Grenfell, D. R.
Paling, W.
Woods, G. S. (Finsbury)


Griffith, G. A. (Hermsworth)
Parkinson, J. A.



Griffiths, J. (Llanelly)
Pearson, A.
TELLERS FOR THE AYES.— 




Mr. Mathers and Mr. Adamson




NOES.


Acland-Troyte, Lt.-Col. G. J.
Beamish, Rear-Admiral T. P. H.
Broadbridge, Sir G. T.


Adams, S. V. T. (Leeds, W.)
Beaumont, Hon. R. E. B. (Portsm'h)
Brocklebank, Sir Edmund


Albery, Sir Irving
Beit, Sir A. L.
Brooke, H. (Lewisham, W.)


Allen, Col. J. Sandeman (B'knhead)
Bennett, Sir E. N.
Bullock, Capt. M.


Anderson, Sir A. Garrett (C. of Ldn.)
Bernays, R. H.
Brown, Brig.-Gen. H. C. (Newbury)


Anstruther-Gray, W. J.
Blair, Sir R.
Burgin, Rt. Hon. E. L.


Aske, Sir R. W.
Bossom, A. C.
Burton, Col. H. W.


Assheton, R.
Bolton, W. W.
Butcher, H. W.


Baillie, Sir A. W. M.
Boyce, H. Leslie
Cartland, J. R. H.


Baldwin-Webb, Col. J.
Bracken, B.
Carver, Major W. H.


Balniel, Lord
Braithwaite, Major A. N. (Buckrose)
Cary, R. A.


Barrie, Sir C. C.
Brass, Sir W.
Cayzer, Sir C. W. (City of Chester) 


Baxter, A. Beverley
Briscoe, Capt. R. G.
Cazalet, Capt. V. A. (Chippenham) 




Chamberlain, Rt. Hn. N. (Edgb't'n)
Hely-Hutchinson, M. R.
Rawson, Sir Cooper


Channon, H.
Heneage, Lieut.-Colonel A. P.
Read, Sir H. S. (Aylesbury)


Chapman, A. (Rutherglen)
Hepburn, P. G. T. Buchan-
Remer, J. R.


Chapman, Sir S. (Edinburgh, S.)
Hepworth, J.
Rickards, G. W. (Skipton)


Christie, J. A.
Higgs, W. F.
Ropner, Colonel L.


Churchill, Rt. Hon. Winston S.
Holdsworth, H.
Rosbotham, Sir T.


Clarke, Colonel R. S. (E. Grinstead)
Holmes, J. S.
Roes Taylor, W. (Woodbridge)


Clarry, Sir Reginald
Hore-Belisha, Rt. Hon. L.
Rowlands, G.


Cobb, Captain E. C. (Preston)
Howitt, Dr. A. B.
Royds, Admiral Sir P. M. R.


Colfox, Major Sir W. P.
Hudson, Capt. A. U. M. (Hack., N.)
Ruggles-Brise, Colonel Sir E. A.


Colville, Rt. Hon. John
Hume, Sir G. H.
Russell, Sir Alexander


Conant, Captain R. J. E.
Hunloke, H. P.
Russell, S. H. M. (Darwen)


Cook, Sir T. R. A. M. (Norfolk, N.)
Hunter, T.
Salmon, Sir I.


Cooke, J. D. (Hammersmith. 5.)
Jarvis, Sir J. J.
Salt, E. W


Cooper, Rt. Hn. A. Duff (W't'rS. G'gs)
Jones, Sir H. Haydn (Merioneth)
Samuel, M. R. A.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Jones, L. (Swansea W.)
Sandeman, Sir N. S.


Courthope, Col. Rt. Hon. Sir G. L.
Kellett, Major E. O.
Sanderson, Sir F. B.


Craven-Ellis, W.
Kerr, H. W. (Oldham)
Schuster, Sir G. E.


Crooke, Sir J. Smedley
Kerr, Sir John Graham (Sco'sh Univs.)
Seely, Sir H. M.


Crookshank, Capt. Rt. Hon. H. F. C.
Keyes, Admiral of the Fleet Sir R.
Selley, H. R.


Cross, R. H.
Kimbull, L.
Shakespeare, G. H.


Crossley, A. C.
Lamb, Sir J. Q.
Shepperson, Sir E. W


Crewder, J. F. E.
Leech, Sir J. W.
Shute, Colonel Sir J. A


Culverwell, C. T.
Lennox-Boyd, A. T. L,
Simon, Rt. Hon. Sir J. A.


Davies, C. (Montgomery)
Levy, T.
Smith, Sir R. W. (Aberdeen)


De Chair, S. S.
Liddall, W. S.
Smithers, Sir W.


De la Bère, R.
Lindsay, K. M.
Snadden, W. McN.


Denman, Hon. R. D.
Looker-Lampson, Com dr. o. S.
Somervell, Rt. Hon. Sir Donald


Despencer-Robertson, Major J. A. F.
Loftus, P. C.
Somerville, Sir A. A. (Windsor)


Doland, G. F.
Mabane, W. (Huddersfield)
Southby, Commander Sir A. R. J.


Dorman-Smith, Col. Rt. Hon. Sir R. H.
MacAndrew, Colonel Sir C. G.
Spears, Brigadier-General E. L.


Drewe, C.
McCorquodale, M. S.
Spens, W. P.


Dugdale, Captain T. L.
McKie, J. H.
Stanley, Rt. Hon. Oliver (W'm'l'd)


Duggan, H. J.
Magnay, T.
Stewart, J. Henderson (Fife, E.)


Duncan, J. A. L.
Maitland, Sir Adam
Stourton, Major Hon. J. J.


Edge, Sir W.
Makins, Brigadier-General Sir Ernest
Strauss, H. G. (Norwich)


Edmondson, Major Sir J
Manningham-Buller, Sir M.
Strickland, Captain W. F.


Ellis, Sir G.
Margesson, Capt. Rt. Hon. H. D. R.
Stuart, Rt. Hon. J. (Moray and Nairn)


Emmott, C. E. G. C.
Markham, S. F.
Sueter, Rear-Admiral Sir M. F.


Emrys-Evans, P. V.
Marsden, Commander A.
Tasker, Sir R. I.


Errington, E.
Mason, Lt.-Col. Hon. G. K. M.
Tate, Mavis C.


Erskine-Hill, A. G.
Maxwell, Hon. S. A.
Taylor, Vice-Adm. E. A. (Padd., S.)


Evans, Colonel A. (Cardiff, S.)
Meller, Sir R. J. (Mitcham)
Thomas, J. P. L.


Evans, D. O. (Cardigan)
Mellor, Sir J. S. P. (Tamworth)
Thomson, Sir J. D. W.


Evans, E. (Univ. of Wales)
Mills, Sir F. (Leyton, E.)
Thorneycroft, G. E. P.


Everard, Sir William Lindsay
Mills, Major J. D. (New Forest)
Thornton-Kemsley, C. N.


Fildes, Sir H.
Moore-Brabazon, Lt.-Col. J. T. C.
Titchfield, Marquees of


Findlay, Sir E.
Morgan, R. H. (Worcester, Stourbridge)
Touche, G. C.


Fleming, E. L.
Morris-Jones, Sir Henry
Train, Sir J.


Foot, D. M.
Morrison, G. A. (Scottish Univ's.)
Tryon, Major Rt. Hon. G. C


Fox, Sir G. W. O.
Morrison, Rt. Hon. W. S. (Cirencester)
Tufnell, Lieut.-Commander R L.


Gibson, Sir C. G. (Pudsey and Otley)
Munro, P.
Wakefield, W. W.


Gilmour, Lt.-Col. Rt. Hon. Sir J.
Neven-Spence, Major B. H. H.
Wallace, Capt. Rt. Hon. Euan


Gluckstein, L. H.
Nicholson, G. (Farnham)
Ward, Lieut.-Col. Sir A. L. (Hull)


Glyn, Major Sir R. G. C.
Nicolson, Hon. H. G.
Warrender, Sir V.


Goldie, N. B
O'Connor, Sir Terence J.
Waterhouse, Captain C.


Gower, Sir R. V.
O'Neill, Rt. Hon. Sir Hugh
Wayland, Sir W. A.


Grant-Ferris, Flight-Lieutenant R.
Orr-Ewing, I. L.
Wells, Sir Sydney


Granville, E. L.
Owen, Major G.
White, H. Graham


Grattan-Doyle, Sir N.
Peat, C. U.
Whiteley, Major J. P. (Buckingham)


Gridley, Sir A. B.
Petherick, M.
Williams, H. G. (Croydon, S.)


Griffith, F. Kingsley (Mdl'sbro, W.)
Pilkington, R.
Willoughby de Eresby, Lord


Grimston, R. V.
Ponsonby, Col. C. E.
Windsor-Clive, Lieut.-Colonel G.


Gritten, W. G. Howard
Porritt, R. W.
Wise, A. R.


Gunston, Capt. Sir D. W.
Pownall, Lt.-Col. Sir Assheton
Womersley, Sir W. J.


Hacking, Rt. Hon. Sir D. H.
Procter, Major H. A.
Wright, Wing-Commander J. A. C.


Hannon, Sir P. J. H.
Radford, E. A.
York, C.


Harbord, Sir A.
Raikes, H. V. A. M.
Young, A. S. L. (Partick)


Harris, Sir P. A.
Ramsay, Captain A. H. M.



Haslam, Henry (Horncastle)
Ramsden, Sir E.
TELLERS FOR THE NOES.—


Haslam, Sir J. (Bolton)
Rankin, Sir R.
Captain McEwen and Lieut.-




Colonel Harvie Watt.

NEW CLAUSE.—(Payment of Death Duties.)

Within sixty days of the death of any person liable to Death Duties, the executors or trustees may elect to present to the Commissioners particulars of the assets of the deceased's estate which it is intended to realise in payment of Death Duties being of an equal nominal value to that included by the Commissioners as their value at the date of the death of the deceased person.

On the realisation of these named assets the sum they produce in money shall be accepted by the Commissioners in satisfaction of Death Duties, whether in fact the sum realised is greater or smaller than the sum demanded based on the valuation at the date of the death of the deceased person.—[Sir W. Wayland.]

Brought up, and read the First time.

5.57 p.m.

Sir William Wayland: I beg to move, "That the Clause be read a Second time."
This is one of the rare proposals which do not cost the Treasury anything. It might be that the Treasury would lose on the swings, but it would gain another time on the roundabouts. We all know that the value of an estate is estimated at the time of a person's death and that the executors are left to realise the estate. I want to point out to the Chancellor that we do not live now in the peaceful times of the 'eighties or even the 'nineties. Markets are liable to drop very quickly or to rise sometimes. Presuming that an executor realises, as has been done lately, a much less sum than that at which the estate has been valued, those who were to inherit, maybe many shares or property of another kind, would lose considerably. A case was brought to my notice in which an estate was valued at the time of a man's death at £100,000. When the shares were sold they did not realise as much as was due to the Exchequer. That condition of things is not right.
The proposed new Clause would work in this way: The estate would be valued at the time of the person's death. Then the executors or trustees would be given power to notify the Commissioners that they intended to take a certain part of the estate which was of the nominal value, at the time of the death, of the sum required to satisfy the Death Duties. Whether that part of the estate realised the amount which the Exchequer demanded or not, it should be taken as representing the value of the shares at the time of the persons' death. Assuming that a man or woman were to die in the near future, and the value of the estate was given for Death Duty purposes, what would be the value of the shares or property comprising the estate if war clouds gathered? During the Great War, the value of property in London fell by over 50 per cent., and the value of shares might fall by as much as 80 per cent. so that, instead of the heirs receiving anything, the Exchequer might come upon the executors to pay something more than the estate actually realised. That, I contend, is grossly unfair. The Chancellor may say that such a proposal as I am making cannot be carried out, because it would involve too

much office work, or because the Treasury might lose, but I would only say that, if a thing is just, it must be carried out, and I contend that it is just that the amount realised by the estate should be taken as the value for Treasury purposes.

6.2 p.m.

Mr. Spens: I beg to second the Motion.
I do not claim that the Clause, as drafted, is as perfect as it might be, because it would, I think, entitle executors to pick out and appropriate to the Revenue the assets most difficult to realise. But the underlying principle, which is very familiar in dealing with interests in any estate, is that, where a number of persons share in an estate which has to be realised, their shares are appropriated to them as at the material date—in this case the date of death— and they are realised for better or worse and regarded as the respective shares of the persons concerned. The present system with regard to Death Duties is that an estate is valued at the market value on the date of the death, and, when realised, it may produce more than that valuation or it may produce less. If it produces more, the beneficiaries get off by having to sell fewer assets than they had anticipated, while the Revenue gets the sum stipulated. In recent years, however, when markets have been continually falling, this claim has been made from more and more quarters throughout the country, but the sum that has to be realised by the Revenue remains the same no matter what it may cost the beneficiaries. As my hon. Friend has said, that is not fair as between the beneficiaries and the Revenue. In other words, from the point of view of the Revenue it is a case of "Heads I win, tails you lose."

Mr. Silverman: That is the way you want it.

Mr. Spens: If the hon. Member had taken the trouble to read the Clause, he would have seen that that is exactly what we do not want. The Clause leaves no option whatever to the taxpayer. If it be assumed that the rate of duty works out at one-fifth of the total value of the estate as at the date of death, one-fifth of the assets at that value would be appropriated to the Revenue. If the market rises, the Revenue will realise that and


get more duty, while, if the market falls, the Revenue will suffer in the same way as the beneficiaries. It would make the matter fair as between the Revenue and the taxpayer. Therefore, I would ask the House to give serious consideration to the principle involved. The present method was put into the Finance Act in 1894, when matters in this country were very different, and it really is not standing the test of time.

6.6 p.m.

Sir J. Simon: While my hon. Friends have made interesting speeches, they will not be surprised to hear that I cannot accept this proposal either as it is on the Paper or, as my hon. and learned Friend the Member for Ashford (Mr. Spens) suggests, in its broader sense. I must say that, reading the Clause, I should have thought it was giving the executors or trustees an option. I do not quite understand what the meaning of the wording is if it does not mean that. I quite agree that the substance of the matter is not to be judged simply by examining the precise language of the Clause. There are two principles which lie at the root of the Estate Duty law. One is that, for the purposes of Death Duties, the value of the estate is to be the value as at the date of death; and the other principle, which follows from the first, is that whether subsequently some particular part of the property receives an accretion or suffers diminution of value does not alter the amount which has to be paid. It would appear to me that a very large reconstruction would be needed in this part of our law if we were to depart widely from these two principles.
As the House knows, the free personal estate has to be made the subject of Estate Duty as a condition of getting probate at all, but, apart from that, there are in many cases other elements in the estate which are not necessarily free—possibly interests under settlements and so on—of even the existence of which the executors and trustees sometimes did not know when the previous owner died, and which necessitate prolonged investigation. It would be an odd thing to say that executors and trustees should have the privilege of picking out such portion of the estate as they think is suitable and informing the Revenue that that is the portion of the estate which has to bear the

Death Duties whatever may be its fortune. That certainly is what the Clause says.
I do not understand the scheme as stated in the Clause. It seems to assume that, within 60 days of the death of any person, there is some list or other which the Commissioners give to the executors, and in which they price out and give a nominal value to each piece of the property. That does not happen at all. It is the executors who make the affidavit setting out what the property is, in many cases stating its value, and in other cases stating that the value is to be investigated; and there are many cases in which some portion at any rate of the property is not valued until much later. I could not hold out any hope of changing the general nature of that system. The instances which my hon. Friend the Member for Canterbury (Sir W. Wayland) gave—and I do not at all deny that there are instances which work out very hardly and involve great sacrifice on the part of some beneficiaries—prove conclusively that he was wrong when he said at the beginning that his Clause would not cost the Treasury anything at all, for the whole object of the illustrations was to show that, as things are, the Treasury gets too much and other people get too little.
Finally, I should doubt whether it is quite a true view of the law relating to Death Duties to say that, as my hon. and learned Friend the Member for Ashford suggested, we should treat the State as though it was one of the heirs who was to take pot luck with the other interests. Under the law, the State takes a toll in the form of tax from the estate. The right hon. Gentleman opposite had another plan the other day, by which it would be taken annually, but under our existing system it is taken at death. But in any case I think it would probably be truer to say that the claim of the State is a prior claim to that of the beneficiaries. It does not share with the other beneficiaries and take pot luck with them, but we endeavour to fix what is thought to be, in the judgment of the House of Commons, a proper rate of duty, which varies very greatly according to the total size of the estate, and the payment of that duty is exacted by law from the estate when death occurs. The beneficiaries then receive their various rights according to law. I should be the


last to suggest that the present system does not work very hardly in some cases; it would be the greatest folly to suggest that that is not so; it sometimes involves fearful burdens on members of the family, and that ought to be recognised; but I do not think we can alter it in this way, and the responsibility for the revenue if it were left to be realised from some particular piece of property selected for the purpose by the benevolence of executors and trustees is one which I am not prepared to assume.

Sir W. Wayland: Although I am very unconvinced by the arguments of the Chancellor of the Exchequer, I will not press the matter. I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

CLAUSE 10.—(Reduction of duty on certain mechanically propelled vehicles used for agricultural purposes.)

6.12 p.m.

Captain Hudson: I beg to move, in page 7, line 11, after "implements," to insert:
A living van for the accommodation of the persons employed in connection with the vehicle.
Although it may seem somewhat strange to say so, this is a drafting Amendment. The words were left out when the Bill was printed, owing to a mistake for which I apologise. The Clause purports to set out the law as it stands, and it is incomplete without these words.

Mr. Pethick-Lawrence: I do not think we have had a sufficient explanation of this Amendment. I would like the Parliamentary Secretary to make it a little clearer.

Captain Hudson: I had hoped that the matter was fairly clear. I apologise to the House for the fact that the Amendment has to be a manuscript Amendment, but we discovered only this morning that the words in question had been left out. Paragraph (a, i) of Sub-section (1) of Clause 10, if these words are included, will read as follows:
for hauling their own necessary gear, threshing appliances, farming implements, a living van for the accommodation of the persons employed in connection with the vehicle, or supplies of water or fuel required for the purposes of the vehicle or for agricultural purposes.

If we left out those words it would mean that the living van would be out of the Bill. I apologise for taking the time of the House over a matter which ought not to have come before it at all.

6.16 p.m.

Mr. Pethick-Lawrence: I do not think the hon. and gallant Gentleman has given us a very fair explanation. What I understand is that in some previous Act the words he proposed to include were not there at first, and later were put in. Therefore, he wants to have both the original words and these subsequent words included. [An HON. MEMBER: "No."] I am quite prepared to admit that I am probably wrong. I am explaining how I understood the hon. and gallant Member. It is because I am in the dark about it that I make my objections. If any hon. Member can explain what is the position, I shall be glad to listen to him.

Sir Herbert Williams: I accept the right hon. Gentleman's invitation to explain the position. In the printing of this Bill, in quoting from another Act of Parliament, certain words were inadvertently left out. All my hon. and gallant Friend is trying to do is to put in what the printers left out. That does not involve any question of principle.

6.18 p.m.

Captain Hudson: If the right hon. Gentleman looks at Clause 10, he will see that it says:
In paragraph 4 of the Second Schedule to the Finance Act, 1920 (which, as amended by the Seventh Schedule to the Finance Act, 1933 prescribes the rate of duty payable under Section thirteen of the Finance Act, 1920, in respect of the mechanically propelled vehicles therein mentioned), for sub-paragraph (a) there shall be substituted the following sub-paragraph. …
For purpose of clarity we set out how the paragraph from the Act of 1920 should now read. I inquired of the draftsman whether we should also put in "and the Finance Act, 1935," but I am told by him that it is not necessary. This Amendment sets out exactly what the law is at present. It is put in in order to save people having to look back to different amending Acts, going back to 1920. These words were merely left out by error.

Mr. Watkins: I am still very much in doubt as to the real meaning of the proposal. I remember that when this part of the Finance Bill was before the House


previously, it was explained at some length that this part of the duty was specifically and only for agricultural vehicles in and about a farm. If so, why should the Clause include a reference to a living van, which is used for travelling. The words "living van" indicate that there is a staff attached to the implement, who would live in the van, and that a certain amount of travelling would be involved.

Mr. McCorquodale: The hon. Member for South Croydon (Sir H. Williams) suggests that the fault lay with the printer. I am a printer, and I protest. He has blamed the printer without any evidence.

6.21 p.m.

Mr. Ede: Is it not plain that the person who drafted this Clause had an un-amended copy of one of the Acts in front of him, in which these words had not been inserted.

Captain Hudson: I said so in apologising.

Mr. Ede: The hon. and gallant Gentleman did not make the confession quite as plain as that. Is he quite sure that the copies of the various Acts that are used in his Department are brought up to date from time to time, so as to include all the Amendments we spend our time in making? I remember that last September, when it was proposed to evacuate certain children from London into Surrey, the Government Department responsible for the evacuation relied on a statement of the county districts in Surrey which had been wiped out in 1933, and sent a large number of children to districts which had no facilities for them. It is reasonable to suggest that some efficiency should be maintained in the Departments of the Government. This incident is a small matter, and the House has quite rightly treated it with some levity, but we should give a warning that Government Departments should take some notice of what we do in our spare time from day to day in this House.

Amendment agreed to.

CLAUSE 14.—(Apportionment of income under s. 21 of Finance Act, 1922, to be automatic in the case of certain investment companies.)

6.23 p.m.

The Attorney-General (Sir Donald Somervell): I beg to move, in page 10,

line 23, to leave out from "deduction" to "shall" in line 25.
This Amendment and the next go together. The Clause contains no provision under which management expenses could be deducted before arriving at the figure of income due to be apportioned under the Clause. One reason for that is that in some of these companies efforts had been made, under the guise of management expenses, to distribute part of the income of the company. The remuneration to officials or others was some times not proportionate to the services rendered, and that was a way in which the general provisions in regard to companies were, in part at any rate, being defeated. On the Committee stage the point was made that injustice might be done to perfectly genuine companies which were incurring reasonable expenses in the management of their businesses, and which appointed to their boards persons who had skill in some special matter. That point appeared to us to be perfectly fair, and the two Amendments follow upon an assurance that I gave that the matter would be considered. The Clause covers such expenses of management as the Special Commissioners consider reasonable, having regard to the requirements of a company's business, and, in the case of payments to directors or other people, the actual services rendered to the company.

6.25 p.m.

Sir H. Williams: I should like to thank the Attorney-General for these two Amendments, which, in principle, are the same as those I put down on the Committee stage, and the same as the Amendments which, I believe, were put down by another group of hon. Members. It seems unfair that legitimate expenses should not be allowed as a charge against profits. The Attorney-General has met the matter in a satisfactory way, because the Special Commissioners have to be satisfied, and any attempt to inflate the profits improperly would be prevented. The Attorney-General has done justice to the interests of both the Exchequer and the taxpayer.

6.26 p.m.

Mr. Pethick-Lawrence: When this matter was before the Committee, I entered a caveat on behalf of my hon. Friends that we were not necessarily committed to supporting the proposal if it


should commend itself to the Government. In view of the form of the Amendment and the speech of the Attorney-General, however I think I can recommend it to hon. Members on this side.

Amendment agreed to.

Further Amendment made: In line 29, at the end, insert:
other than deductions for any national defence contribution payable by the company or for any such sums disbursed by the company as expenses of management as the Special Commissioners consider reasonable, having regard to the requirements of the company's business and, in the case of director's fees or other payments for services, to the actual services rendered to the company."—[The Attorney-General.]

6.28 p.m.

The Attorney-General: I beg to move, in page 12, line 10, at the end to insert:
(5) If in the case of any company the cost of maintenance, repairs, insurance and management (being expenditure of such a nature as to be capable of being taken into account for the purposes of a claim by the company under Rule 8 of No. V of Schedule A) incurred by it in any year of assessment exceeds the amount of the gross estate or trading income of the company for that year, the company shall be entitled, on giving notice in writing to the Special Commissioners within six months of the end of that year and on proof to the satisfaction of those Commissioners of the amount of the excess, to require that the amount of the actual income from all sources of the company other than estate or trading income for that year shall be treated, for the purposes of this Section, as if it were reduced by an amount equal to that excess:
Provided that, where a deduction is allowable in computing the estate or trading income of the company for any subsequent year by reference to the said Rule 8, no account shall be taken in computing the amount of that deduction of any such excess expenditure which has been taken into account for the purposes of any such reduction as aforesaid.
In this Sub-section the expression "maintenance" has the same meaning as in the said Rule 8 and the expression "the amount of the gross estate or trading income" means, in the case of any company, an amount computed by adding to the amount of the estate or trading income of the company the total amount of any deductions made in computing that income in respect of the cost to the company of maintenance, repairs, insurance, or management of the nature aforesaid (including any allowance made by reference to Rule 7 of No". V of Schedule A).
This Amendment also arises out of a discussion on the Committee stage. As the House remembers, Clause 14 is directed against investment companies; but we have to deal with the case of companies which have both investment and

other assets. The discussion arose, in particular with regard to estate companies which also had investments. It was pointed out that there was not likely to be a case in which an estate company had no investments at all. I pointed out, and it was generally accepted by those who took part in the discussion, that obviously one must not allow a company to get some special concession as an estate company by reason of the fact that some of its assets were in estate, if substantially it was really an investment company, the investment representing the major part of the assets. The point was put as to whether the Clause might operate unfairly, and the intention embodied in Sub-section (3) fail to be carried out if one had a case in which, on the estate side of the business, there was an actual revenue loss.
In the Clause as drafted, in spite of there being an actual revenue loss on the estate side which would fall to be met by part of the income from the investments, the total income from those investments would be deemed to have been distributed and Surtax would have to be paid upon it. That appeared to my right hon. Friend to be a sound and a fair point and one which really fell to be dealt with and met within the general intention already embodied in Sub-section (3). The Amendment which I am now moving deals with that point. It is slightly complicated owing to the complex nature of these matters, but it provides that if on the estate there is an actual revenue loss—that loss, being estimated according to the Income Tax principles embodied in Schedule A—if there is an actual loss in a particular year the amount of investment income sufficient to cover that loss can be deducted from the amount of investment income deemed automatically to be distributed. The provisions in the latter part of the Sub-section merely provide the necessary machinery for making that effective. I hope that that sufficiently explains the Amendment to the House.

6.33 p.m.

Mr. Benson: The effect of this Amendment can be fairly concisely stated by saying that in certain circumstances the losses on Schedule A may be put against income arising under other schedules. This concession has been limited to one class of people, namely, the farmers. Here we have an extension of the conces-


sion which was granted to farmers, who can put losses under Schedule D against other losses. It may seem perfectly logical that, if you have your income divided into a number of schedules, a loss on one schedule should be allowed to be set against a surplus on other schedules. The particular schedule chosen here—Schedule A—is assessed normally in a different way front the assessment of other schedules. On Schedule A you pay according to a formula and not according to the actual net income received. That formula as a rule works against the Exchequer. If over a period of five years the Income Tax payer finds that he has not had sufficient allowance under Schedule A, he can put in a quinquennial claim, but if, on the other hand, he finds that he has received more income than the actual formula brings into charge for tax he makes no refund. Therefore Schedule A tends steadily to work against the Government.
If you are to make this change in our tax law, you ought to make the assessment under Schedule A actually coincide with the real income. If you are to make it possible for "the Schedule A income to be set against Schedules B, C or D, there is no justification whatever for limiting the concession to one small group of people, namely, the landowners who turn their estates into limited companies. If this concession is justifiable, it should be applied to all and sundry and not to a few wealthy people. A large number of advantages are to be gained by turning an estate into a limited company, and I do not see any reason whatever why under this Amendment we should add a further advantage to that small group when it is not extended to others who might be just as much entitled to it.

6.39 p.m.

Mr. Spens: Although one is very grateful for the Amendment, the suggestion that it is adding an advantage to owners of estate companies is quite wrong. The position under the law as it stands to-day is that you are entitled, so far as you have items chargeable under Schedule A, to charge them against the income accruing from the estate, and against no other income of the company. In addition to that, under the Section of the Act of 1921 which we are amending, the company is entitled to ask the Commissioners to

absolve them from making their shareholders liable to Surtax on any additional income which the Commissioners consider has in the circumstances been properly spent on the land. Under that arrangement not only do landowners get the particular items mentioned in Sub-section (5), that is to say, cost of maintenance, repairs, insurance and management, which are very definite and limited in scope, but in addition, rightly or wrongly, for the last 15 or 20 years, landowners have been able to get additional income which has not gone into repairs but into modernising their farms and cottages for the benefit of the estate as a whole. In times past they have been allowed to apply the income of the company from whatever source in putting up, say, a modern electrified dairy for the benefit of the people of the country. If the Commissioners have been satisfied that the result of that expenditure was for the benefit of the estate, and to secure the future income from that estate for the benefit very largely of the Chancellor of the Exchequer, they have not required that sum to be distributed and Surtax to be charged.
This Clause is automatically providing that every penny of income that comes from any source other than the estate itself must either be distributed, or Surtax must be paid. Even if good owners of estates think fit not to distribute the income but to put it back in the form of modernised and improved buildings and so forth, none the less, those who are interested in the estate company will have to pay Surtax on income they have not received, but which, as good agriculturists, they have thought it necessary to put back into the land. One hates to look at any sort of concession in this way, but it would not be right to imagine that it will give more to the owners interested in those companies than has been the case in the past. Indeed, it will give them substantially less than what they are getting under the existing law. That may be right, but it is a substantial change of policy.
While this concession gives them the right either to pay out of the estate income, or out of any other income, everything that comes under the maintenance claim in Schedule A, and that income will not be subject to Surtax, this is a very much narrower field than hitherto the


Commissioners have allowed to these companies. Although I thank the right hon. Gentleman for the concession, I must point out that fact. Take the case of the farm that perhaps comes back on to the hands of the owner who has to run it for a year at a loss. That is not a loss allowed under Schedule A at all. There are a number of items not of extravagant expenditure or anything of that sort, but such as the cost of insurance and repairs, and the good landowner who expends his income in that way and does not put it into his own pocket will find that he will have to pay Surtax upon it.

6.44 p.m.

Mr. Pethick-Lawrence: I have listened very carefully to what has been said with regard to this Amendment. The hon. and learned Gentleman the Member for Ashford (Mr. Spens) has stated the facts correctly, but I do not quite understand him when he says that the landowner will have to pay for this, that and the other, and will not get the advantage, when in all these matters an estate which is turned into a company will continue to get an advantage over an estate which has not been turned into a company. That is where I agree with the hon. Member for Chesterfield (Mr. Benson). I do not see why there should be this distinction. I am prepared to admit that the law is not sound with regard to a failure to set off losses against gains. There may be something in what the hon. and learned Member has said about a landlord who puts his money into the repair of buildings being unfairly treated under the existing law, but the fact is that we are not changing the law in regard to a landlord who is the owner of an estate and has not turned it into a company.
There are all sorts of proposals for amendments of the Income Tax laws. A committee sat for over seven years and produced a most profound volume of qualifications and amendments, but the Government have done nothing about it, and are not proposing to do anything. I think it is time that we altered our Income Tax laws, which are in some ways unfair to the taxpayer and in some ways too lenient. I do not see why we should put certain taxpayers in an advantageous position as compared with others. I have never been able to see why we should give a favourable position to people who choose to turn their estates into companies. If you are going to enforce the

law as against the man it is still more unfair if you make a distinction between a man and a company. I should be quite prepared to consider an amendment of the law but I do not approve of the proposals contained in this Amendment.

6.48 p.m.

The Attorney-General: Let me deal with the points raised by the hon. and learned Member for Ashford (Mr. Spens) with regard to farming losses, to which I think the hon. Member for Chesterfield (Mr. Benson) also referred. Losses of that kind can be in the case of individuals set off against other income. I can assure the hon. and learned Member that under the Amendment these losses in the case of a company can equally be set off against the investment income, and in so far as they are farming losses they can, under the Clause as originally introduced, be set off, in the case of a company owning an estate and investments, against the investment income, that is in Sub-section (2), paragraph (a). As to the more general points which have been raised, I think the remarks of the hon. Member for Chesterfield may have been misunderstood when he suggested that the principles of Income Tax operate to set off losses of one Schedule against another. This proposal has nothing to do with Income Tax. What the Clause does is to say that in the case of an investment company the income shall automatically be deemed to be distributed in to to. Under the legislation since 1922 in the case of all companies who come within the Section, whether they run businesses, own assets or hold investments they could specify to the Special Commissioners that they had made provision for current requirements and developments, and under the application of those words money which has been put to revenue account, money spent on capital account, and reserves for capital development, have all been treated as legitimate items in considering what balance was available for distribution.
The Amendment removes that provision in the case of investment companies and in the case of a company which holds nothing but investments the problem is easy if the principle of the Clause is accepted. It was never designed to operate in the case of trading companies or in the case of estate companies. The problem which arose was with regard to


the case where both elements were present. The hon. and learned Member stated the position quite accurately. This is not a case, therefore, of raising any general question of Schedule against Schedule; it is simply trying to get the right provision for applying the principles of the Clause to investments but making a proper provision for the mixed estate investment company; while dealing with investments on lines which are applicable to an investment company does not remove in an unjust way the general principle of an estate company regarded as an estate company or a trading company regarded as a trading company running a trade or business. I therefore suggest that this is not introducing a new principle, it is simply considering within the provisions of the Clause how we can properly draw the line.
The hon. and learned Member said that he was grateful for the Clause, but disappointed that it did not go as far as it should go, and he quoted examples of the type of expenditure which are not capital in any extreme sense; they are not new developments of capital within the Income Tax principles in the sense that they are putting up something new and not merely maintaining or improving

existing farmhouses and buildings. The House, I think, appreciates that this problem which has led to the Amendment proposed by the Government arises in the case of a company which distributes none of its estate income, but in addition to its estate income also has investment income. If it distributes all its investment income it is not hit by the Clause at all.

We feel that these are the fair lines on which to meet the problem which has been raised. I have said since the point was raised that the problem as to how exactly the line should be drawn to preserve the principle of the Clause as applied to all investments and at the same time make a fair provision for estate companies in particular, is not an easy one; it is not a thing which on simple academic principles leads to a result. Of course, it can be considered, as can all other matters, in the actual working. We believe that the proposal will meet the hard case, and as it is based on a fair principle I hope the House will accept it.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 227; Noes, 123.

7.5 p.m.

The Attorney-General: I beg to move, in page 12, line 29, after "B," to insert:
income arising in respect of the ownership or occupation of land which is chargeable to Income Tax under Schedule D.
This and the next Amendment on the Order Paper are related to each other. They arose out of a discussion on an Amendment in the name of the hon. and learned Member for Ashford (Mr. Spens) in Committee. He pointed out that under the Bill as drafted the provision for defining estate income referred to Schedules A and B, but that certain incomes arising from land and formerly chargeable under those Schedules had been transferred to Schedule D, and therefore under the Clause as originally introduced would fall outside the definition of estate income. That seemed to me a good point, because this Clause is directed against investment companies holding ordinary investments. An estate company which had nothing but interests arising out of land was excepted altogether. The sort of items which arise from land and which used to be under Schedules A and B are such things—here I have to go carefully because the hon. Member for Chesterfield (Mr. Benson) is apt to get slightly indignant at any mention of them—as manorial dues, profits from quarries and mines, income from mining rents and royalties—which are being turned into securities under recent legislation, income from the furnished letting of house property, sporting rights, and so on. These are clearly incomes which can properly come within the definition of estate income for the purposes of this Clause. They all arise from land. For the convenience of machinery, and possibly for other purposes, they were transferred to Schedule D some time ago, but we think it right that for the purposes of this Clause they should be regarded as estate income.

7.9 p.m.

Mr. Benson: The explanation of the Attorney-General does not in any way modify my opposition to these Amendments. I am prepared to admit that if you except income arising under Schedules A and B from the operation of this Clause a good case can be made for the income referred to in these Amendments, but I am not prepared to admit that Schedules A and B should be

removed from the operation of this Clause. Under Section 21 of the 1922 Act, limited companies are allowed to build up reserves to a certain extent and these are not brought into charge for Surtax, whereas in the case of a private individual the income would have been brought into charge before it was placed to reserve. I strongly object to a man who may turn his property into a limited company having tax advantages which do not accrue to a man who retains his property vested in himself. To allow untaxed reserves to be built up is diametrically opposed to the basic principle of Surtax, which is that a man shall pay a differential rate of Surtax on his income irrespective of whether he saves every penny or spends it. The mere fact that he interposes a limited company between himself and the Exchequer is no reason why he should be allowed to escape.
My opposition is not only to manorial rights, fair dues and the like, but to such irritating things as bridge tolls. Under this Bill a man who has some ramshackle wooden bridge—I remember having to go over one in a Yorkshire town and pay Is., and the memory still rankles—would be entitled to put aside part of the income from his tolls for the purpose of rebuilding that bridge untaxed if he had transferred the bridge to a limited company. Apart from the type of income which the right hon. and learned Gentleman is proposing to except, the whole principle of allowing a limited company advantages which a private individual does not get is indefensible.

7.13 p.m.

Mr. Spens: May I thank my right hon. and learned Friend for these Amendments? I entirely understand the attitude of the hon. Member for Chesterfield (Mr. Benson) that it is not right that a limited company should get an advantage over an individual, but the circumstances with which we are dealing have been the law of the land for a great number of years and now you are altering it retrospectively. You are making the alterations under this Clause refer to the Surtax of 1938–39. It is because we are altering the law and attempting to preserve some of the advantages that an estate company has had in the past that these Amendments are necessary. But as originally drafted the intention of the


Clause would not have been carried out, because an estate company's sole income would not have come under Schedules A and B. As it is now the intention of the Clause will be carried out, and I thank my right hon. and learned Friend for the Amendments.

Mr. Pethick-Lawrence: I listened to what the hon. Member behind me said, but in view of the explanation given by the right hon. and learned Gentleman I do not propose to oppose the Amendments.

Amendment agreed to.

Further Amendment made: In page 12, line 31, at the end, insert:
For the purposes of this Sub-section the expression 'land' means lands, tenements, hereditaments and heritages, and the expression 'income arising in respect of the ownership or occupation of land,' in relation to any building or part of a building, includes profits from the letting thereof furnished."—(The Attorney-General.)

CLAUSE 15.—(Extended powers as to apportionment of income of investment companies.)

7.15 p.m.

The Attorney-General: I beg to move, in page 14, line 8, to leave out from "and," to the end of the Sub-section, and to insert:
the Special Commissioners may draw the inference that a person is likely to be able to secure that assets or income of a company will? be applied for his benefit, or, as the case may be, will be so applied to a greater extent than is represented in the value for apportionment purposes of any relevant interests which he has in the company, if and only if they are satisfied—

(a)that he has, directly or indirectly, transferred assets to the company the value of which is not represented, or is not adequately represented, in the value for apportionment purposes of any relevant interests which he has in the company; and
(b)that the persons who, whether as directors or shareholders or in any other capacity, have, or will at any material time have, powers or rights affecting the disposal or application of the income or assets of the company are likely to act in accordance with his wishes or that he is able to secure that persons who at the material times will have such powers or rights will be persons likely to act in accordance with his wishes."
I explained the purpose of this Clause at an earlier stage, but I will briefly recapitulate it in order to make clear the object of the Amendment. The Clause, which is drawn in wide terms and gives

special and exceptional powers to the Special Commissioners, is, in our view, justified by past experience, not of many individuals or companies, but of a limited number; but as that limited number has. very considerable resources, a substantial amount of Surtax is involved. When the 1922 legislation was enacted, it contemplated that the transferor of the assets, the person who had formed the company under the control of not more than five persons, would be the principal shareholder. Therefore, the machinery of apportionment in order that money might not be accumulated without paying Surtax was an apportionment to the shareholders. Various devices, which need not be enumerated here in detail, were then resorted to by a limited number of persons in order that the real person interested should not be the person to whom the income was apportioned. The effect of that was that Surtax was not payable in respect of the income apportioned. Let me take a simple case. Suppose that the income is £5,000 a year, which is being accumulated, and that the person really interested does not intend to take it out until he has saved that sum for two or three years, without paying Surtax on it. The general purpose of the 1922 legislation is not, of course, to prevent his accumulating money, but to say that in cases within that Section Surtax should be paid on the income as if it had been distributed to him.
To take one artificial device, suppose that, instead of being himself the shareholder, he formed another company which was a shareholder in the company which owned the assets; he would then hold shares in the second company, and if then you were able to apportion only to the shareholders, no Surtax would be payable, because the company would not pay the Surtax. Other ways of retaining the effective interest without being at that moment within the definition of those to whom income could be apportioned, were dealt with in later years. As far as concerns persons with rights of any kind in the income or assets of the company, I think that probably they are now covered by existing legislation, but what is anticipated, with reason, is that that field having been covered, arrangements will be made by which the transferor of the assets and the person who ultimately intends to get the benefit of the accumulated income will not appear with any


legal or equitable rights during the year the income of which falls to be apportioned, but will, in fact, be in a position to have such rights conferred on him as and when he wants them, because he will have put in, as the persons who control the company, persons who will comply with his wishes. This Clause is designed to meet that class of cases, and to give the Special Commissioners power to apportion income to someone who may have and will have no legal or equitable rights at the moment, but who may be, in fact, able to secure such rights, and as the Clause says, is a person likely to be able to secure such rights. It was on the words—
Likely to be able to secure that income or assets will be applied for his benefit … etc."—
that discussion arose in the Committee stage. It was said that those were very wide words and that they conferred a very wide discretion, and it was suggested a dangerously wide discretion, unless they were conditioned in certain ways. Under the Clause as originally drafted, there were certain pointers as to matters to which the Commissioners were to have regard in exercising their discretion, or rather in drawing the inference as to whether a person was likely to be able to secure the rights in the income or assets. I then stated that it was our intention that regard should be had to those matters by the Special Commissioners, but it was pointed out that the Clause as drawn did leave the discretion very wide, and that, although it might well be that the Special Commissioners would have regard to those pointers, at any rate, if it was intended to confine the exercise of their discretion, that was not put in the Clause as originally drafted. The purpose of the Amendment is so to confine their discretion. The matters mentioned in the Bill as it left the Committee stage fall under two headings, first:
the question whether or not the persons who, whether as directors or shareholders or in any other capacity have, or will at any material time have, powers or rights affecting the disposal or application of the income or assets, are likely to act in accordance with his wishes.
and also the very important case as to whether on the evidence it appears that the person to whom, under the Clause,

income can be apportioned is a person who has transferred assets to the company which are not represented, or adequately represented, by a consideration in his hand. We feel that in the cases with which we desire to be able to deal under the Clause those conditions will be satisfied, and it really is only in cases where those conditions will be satisfied that we ever contemplated seeking to invoke the powers under this Clause. Therefore, the alteration made by the Amendment is this, and only this, that instead of the discretion being on the actual words of the Clause at large, instead of there being pointers as to how the discretion should be exercised, under, the Amendment the Special Commissioners can only
draw the inference that a person is likely to be able to secure that assets or income of a company will be applied for his benefit … if and only if they are satisfied—

(a) that he has, directly or indirectly, transferred assets to the company the value of which is not represented, or is not adequately represented, in the value for apportionment purposes of any relevant interests which he has in the company; and
(b) that the persons who, whether as directors or shareholders or in any other capacity, have, or will at any material time have, powers or rights affecting the disposal or application the income or assets of the company are likely to act in accordance with his wishes or that he-is able to secure that persons who at the material times will have such powers or rights will be persons likely to act in accordance with his wishes."
When in the Committee stage I stated our willingness to turn these pointers into conditions, my hon. and learned Friend the Member for Ashford (Mr. Spens), although I do not think he felt that this would remove all his objections, felt that it would go at any rate some way towards meeting them. I hope that he and those who share those apprehensions will feel that the Amendment does go some way to meet the apprehensions about putting into a Clause so formidable a discretion, unfettered by any conditions. On the other hand, I assure those who may look at the matter, not differently—because everybody in the House is concerned with seeing that the gross tax evader makes his contribution—but who may scrutinise it from a different angle, that we are satisfied that the change which it is proposed to make will not hamper us. It was, of course, never intended that the Clause could be or should be used except on evidence that there was


a proper case in which to ask the Commissioners to exercise their discretion. This is the class of facts, and the only class of facts, which we should regard as properly entitling the Inland Revenue to put in motion the machinery both for the Commissioners to consider evidence put before them and to exercise the discretion conferred by this Clause.

7.28 p.m.

Mr. Benson: I speak on this involved subject with a great deal of diffidence, but it seems to me that there is one very definite loophole here, and possibly others, although I am not quite sure about them. The Clause deals with the allocation of income for tax purposes to an individual who has no rights at law to it, an individual who has carefully divested himself of any legal right to the income, although by various subterfuges he can obtain the enjoyment of it. Obviously, if a man can obtain the enjoyment of any income, whether or not it is legally his, it ought to be attached to him. But under the Amendment it would be attached to him for tax purposes only if the Special Commissioners were satisfied that he had directly or indirectly transferred assets. This is a parable case to Clause 18 of the Finance Act, 1936, which relates to the transfer of assets abroad, and T think the same loophole will arise here as arises there, and that is that it is only the transferor himself who can come under the machinery of the tax. If he dies, his son may inherit the whole complex of companies; he may, in fact, inherit the power, although not the legal right, to obtain the income and he may be in exactly the same position as his father who had been caught under the Clause because he had definitely transferred assets. But because the man's son has hot transferred the assets, this Clause cannot come into operation. He is in the position of enjoying the assets, but because he has no right in law on the face of it, as his father had, he can avoid the tax. That is one loophole. In regard to others I am not so sure, but it seems to me that for tax avoidance purposes a man might transfer assets which he himself has no intention of enjoying to companies in which his son can obtain enjoyment of them. We know that where these very large incomes and estates are concerned, the question of the income of the children is of considerable importance.

It might be worth while in the construction of these involved and complicated schemes to arrange that a son or heir would by inheritance or transfer, enjoy an advantage which this Clause, prior to amendment would have prevented.
There is one other point about which I am also rather doubtful, and that is the position of a wife. Under the Section in the 1936 Act relating to the transfer of assets abroad, it was considered necessary to define the transferor as including the transferor and his wife. In this case there is no such definition and it seems to me that it might be possible that the shares of a company might be held directly or indirectly in the name of a wife. The husband might transfer the assets and it would not be possible to aggregate the two incomes for tax purposes because ex hypothesi the wife would have no legal right to the income arising from the company, although she would be able to enjoy it. You cannot aggregate the husband and wife's income because she has no legal right to the income and you cannot tax the husband because he has transferred to his wife, who is the only person who can get enjoyment of the income. This is a rather complicated point but I suggest that it might be the case that the potential income of the wife was such that she could enjoy it under the terms of the Clause. I do not know but I think there are certain loopholes here. The question of inheritance raises one definite point. The others are more doubtful but I would ask the Attorney General to give them his attention.

7.34 p.m.

Mr. Hely-Hutchinson: My hon. and learned Friend the Member for Ashford (Mr. Spens) and I raised objections to this Clause on the Committee stage and we are grateful to my right hon. and learned Friend the Attorney-General for his attempt to meet our objections. That attempt has to some extent succeeded, but not altogether. It would be useless now to recapitulate our objections to the Clause which were ably set forth by my hon. and learned Friend in Committee but I would ask my right hon. and learned Friend to pay particular attention to the speech of the hon. Member for Chesterfield (Mr. Benson) because the hypothetical cases which he raised are, alone, sufficient to indicate the danger of legislating in what I may call the subjunctive mood.


I hope that my right hon. and learned Friend will find it possible to return to the more normal process of legislating in the indicative mood.

7.35 p.m.

Mr. Silverman: As I read this Amendment, it is necessary that the Special Commissioners should be satisfied on both points set forth in paragraphs (a) and (b) before they draw the inference which the Amendment entitles them to draw. I wonder why the Attorney-General has thought it necessary to do that. I should have thought that either of these grounds would have been sufficient for the inference that is proposed. If we take paragraph (a) by itself it deals with the case in which assets have been directly or indirectly transferred and there is no corresponding right vested in the transferor. It is obvious that that might in certain cases give rise to the inference and no one would have any objection to that condition. But if we take paragraph (b) by itself what do we find? Suppose there was a case in which condition (a) was not satisfied, in which you could not prove that assets had been directly or indirectly transferred but in which, nevertheless, there were persons who, as directors or shareholders or in any other capacity had rights affecting the disposal or application of the income or assets of the company in accordance with the wishes of another person—who in other words, acted purely as nominees, or perhaps as trustees would have to act, if you could establish that they were in fact trustees. In those circumstances when those persons were acting in the disposition of the company's assets in that way, at the direction or behest of some other person who had no apparent or obvious interest in the assets, would it not be a reasonable inference that there had been some such transfer of assets as is postulated in paragraph (a)? Otherwise, why should persons holding a complete legal and exquitable interest in the assets of a company use their powers as directors or shareholders at the behest of or in accordance with the wishes of someone who has no interest at all in the company? I can see why the right hon. and learned Gentleman has thought it necessary to put down some Amendment in view of the discussions in Committee, and I certainly would not object to his

having done so, but I think he has handicapped himself more than he need have done by requiring that both these conditions should be satisfied, and if they are examined separately it looks as though either of them would do.

7.38 p.m.

Mr. Spens: I thank my right hon. and learned Friend for this Amendment, but I feel that one or two of the speakers have not appreciated the fact that this Amendment applies only to the case in which a person is to be attacked, not because he is able to secure, but merely because he is likely to be able at some future time to secure, this benefit. The earlier part of the Sub-section, of course, catches everybody who is, in fact, able to secure the benefit by any means at any time, and therefore some of the instances given by the hon. Member opposite, as, for instance, the case of the father and son, do not apply. He gave a case in which a father might be taken as the person likely to be able to secure the benefit and in which the father was succeeded by the son, but in that case he comes within the rest of the Clause.

Mr. Benson: But suppose there is no transfer.

Mr. Spens: That does not matter. I was certain that the hon. Member did not appreciate that point. This refers to the person who is attacked, not as a person who is able to secure but as a person who is likely to be able to secure the benefit and it was because both those categories are so wide that I objected altogether to the framework of the Clause at an earlier stage. My right hon. and learned Friend however has assured us that he requires a Clause of this breadth and with these enormous powers, in order to cope with certain persons who are improperly trying to avoid taxation. Therefore, although, on principle, I think that the Clause, even with this Amendment, is very dangerous, I do not think it is possible on a question of principle to press my objection when we are assured by my right hon. and learned Friend that he must have this power if he is to prevent certain persons avoiding the payment of large sums which are due from them in duty. In those circumstances I am bound to say that I think the principle must for the time being go under to the necessity for a Clause of this kind. I hate the idea that it should be necessary to


introduce such a Clause into our legislation and to give to any body of men the powers which this Clause will confer, but if it cannot be done without, then, for better or worse, I suppose we shall have to arm the Executive with these powers. What I think is only right is that as regards the much wider class of people who may be likely to secure a part of somebody else's income, at any rate you should not suddenly name Mr. A or Mr. B or Mrs. C who has not received one penny as a person likely to be able to secure it, until certain definite tests have been applied to show that such a person does in fact come within the scope of the Clause. In the circumstances, I am grateful to my right hon. and learned Friend for the Amendment, and although I do not like the Clause, I think we must submit to it becoming part of the law of the land.

7.43 p.m.

Mr. Pethick-Lawrence: I think it is true that, in its original form, the Clause was rather widely drawn and, therefore, I would not have been unwilling to see the words of the original Clause taken out if suitable words were put in their place, but I think the actual Amendment which the right hon. and learned Gentleman has proposed does lend itself to some doubt. I do not know how far he can answer the points which have been raised by my hon. Friend the Member for Chesterfield (Mr. Benson), but in default of anything further which the Attorney-General may have to say altering my view, I feel that these words do give a loophole and in those circumstances we shall wish to state our opinion against this Amendment. Accordingly I shall ask my hon. Friends to vote against the words being omitted. That does not mean that we think that these words should not be omitted in order to give place to more suitable words, but because we think it would be wrong to insert these words.

7.45 p.m.

The Attorney-General: I shall certainly endeavour to answer the various points which have been made. I am in the happy position that while my hon. Friend the Member for Hastings (Mr. Hely-Hutchinson) and my hon. and learned Friend the Member for Ashford (Mr. Spens) think I am not handicapping myself enough, hon. Members opposite think I am handicapping myself too much,

which seems to indicate that I have hit the happy mean and introduced a fair and equitable solution of this problem. The hon. Member for Chesterfield (Mr. Benson) raised a point which was raised before, as to the position which would arise in the event of a death. The principle has been in these Clauses to deal with what I may call the original transferor. There are difficulties about dealing with what may happen upon succession, particularly in the case of such a Clause as Clause 18 where there is motive. Whether it is that those who resort to those devices are long-lived or whether it is that when, as the poet says, old age, disease and sorrow strike them, they wind up their companies, I cannot for the moment say, but in fact we have not been faced with this as a problem.
So far as this Clause is concerned, therefore, it would be quite wrong to depart from the general principle on which this legislation has been based and in this very wide Clause to introduce a new principle. A son might, as a result of succession, be a person of whom you can say he is able to secure. He might be able to secure that shares were issued to him and it might be a case in which the Commissioners could act under that part of the Clause. But if there was no provision for issuing shares, then I quite agree that the money could not be apportioned to the son under this Clause. I do not think it would be right to introduce in this Clause some new principle which has never been introduced in these Clauses, and which we have not found necessary.
With regard to the position of wives I do not know whether the hon. Gentleman has noticed 6 (a), under which provision is made that a person shall, in the case of an individual, be deemed to include the wife or husband of that individual. That goes a long way to cover his point. Where you are very much at large in considering whether things are done directly or indirectly I think that transactions of the kind suggested might also be covered by those words. With regard to his second case, I am bound to say that I did not quite follow it. I will certainly look into it, and, speaking generally, all I can say to the hon. Gentleman is that I am grateful for his suggestion. We have done our best to produce a form of words which we believe will be effective without being unduly wide. We shall have to see by


experience how it works, and cases which he has in mind, if they do arise, will have to be considered. This Clause is introducing a far wider discretion than has been introduced before. It has been introduced for the reasons I have already described, and we think we shall be able to reach the people we want to reach.
The hon. Member for Nelson and Colne (Mr. Silverman) said, "Why have the two conditions?"I would suggest to him and to hon. and right hon. Gentlemen opposite that the two are really right and proper. Many times the hon. Member for Chesterfield has said "Why should a man be in any different position because he transfers his assets to a company?" I agree with that general description. That is the sort of broad underlying principle, though there are certain exceptions in detail to it. But that involves that you must start by saying that the person must be the one who has transferred the assets. If you did not have this condition you would be going too wide, and you would, so far as the words went, possibly put in jeopardy transactions which are really quite outside any intention of the Clause. Further I think it is right and reasonable that having started by specifying that you are going to ask the Commissioners to apportion income to a person who has no legal right to it merely on the grounds that he is likely to be able to get it, you must take on your shoulders the onus of showing that those in control, without whose action a penny of the income cannot be got, are persons as defined in (b), likely to act in accordance with his wishes. In considering the width of the discretion conferred, and considering the class of cases with which we are trying to deal, it cannot be said that it is unreasonable that we should assume both those two points as matters on which we are ready to satisfy the Commissioners.

7.51 p.m.

Mr. Pritt: I should like to say a few words on the question of whether it is right to have both (a) and (b). You do want to avoid loopholes and at first sight (a) and (b) together seem to avoid

loopholes very well, but those people who are ironically called taxpayers—sbecause they spend a great deal of their time trying to avoid it—they will say "(b) catches us pretty well, but they cannot catch us at our pretty tricks unless they do so under (a) also. But two of us, without any obvious arrangement between us, will transfer assets with some decent- cover to other companies and when each of us is tackled hereafter it will be found that we were caught by (b) but not by (a) because we have not transferred any assets to a company at all. "If I recollect correctly, that sort of coupling of the arrangement in order to avoid the fulfilling of conditions has been done before. It was done particularly, I am reminded, with regard to settlements on children, and I would ask the right hon. and learned Gentleman the Attorney-General to have some consideration given to the question as to whether it would not be better to leave (a) out in those circumstances and let (b) stand alone.

Question put, "That the words proposed to be left out stand part of the Bill."

The House proceeded to a Division, and Mr. SPEAKER having directed that the doors be locked—

Mr. Pethick-Lawrence: (Seated and covered): As I understand it, there has been some irregularity with regard to the Clock, because at your direction the doors were shut, as it appeared to many of us, before the six minutes had elapsed. When the mistake was discovered, the doors were opened and some Members went into the Lobby while others, who had assumed that your order at the time was correct, had gone away. May I suggest that the only way to put the matter right would be to have the Division called again?

Mr. Speaker: I will put the Question again.

Question again put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 118; Noes, 186.

Division No. 233.]
AYES.
[6.56 p.m.


Acland-Troyte, Lt.-Col. G. J.
Channon, H.
Evans, D. O. (Cardigan)


Adams, S. V. T. (Leeds, W.)
Chapman, A. (Rutherglen)
Everard, Sir William Lindsay


Albery, Sir Irving
Chapman, Sir S. (Edinburgh, S.)
Fildes, Sir H.


Alexander, Brig.-Gen. Sir W.
Christie, J. A.
Fleming, E L.


Allen, Col. J. Sandeman (B'knhead)
Clarke, Colonel R. S. (E. Grinstead)
Foot, D. M.


Anderson, Sir A. Garrett (C. of Ldn.)
Carry, Sir Reginald
Fremantle, Sir F. E.


Aske, Sir R. W.
Clydesdale, Marquess of
George, Major G. Lloyd (Pembroke)


Assheton, R.
Cobb, Captain E. C. (Preston)
Gibson, Sir C. G. (Pudsey and Otley)


Baillie, Sir A. W. M.
Colfox, Major Sir W. P.
Gilmour, Lt-Col. Rt. Hon. Sir J.


Baldwin-Webb, Col. J.
Colville, Rt. Hon. John
Goldie, N. B.


Balfour, G. (Hampstead)
Conant, Captain R. J. E.
Gower, Sir R. V.


Balfour, Capt. H. H. (Isle of Thanet)
Cooke, J. D. (Hammersmith, S.)
Gridley, Sir A. B,


Balniel, Lord
Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Griffith, F. Kingsley (M'ddl'sdro, W.)


Barrie, Sir C. C.
Courthope, Col. Rt. Hun. Sir G. L.
Grimston, R. V


Beamish, Rear-Admiral T. P. H.
Craven-Ellis, W.
Gritten, W. G. Howard


Beaumont, Hon. R. E. B. (Portsm'h)
Crooke, Sir J. Smedley
Guest, Lieut.-Colonel H, (Drake)


Beit, Sir A. L.
Crookshank, Capt. Rt. Hon. H. F. C.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)


Bennett, Sir E. N.
Cross, R. H.
Guinness, T. L, E. B.


Bernays, R. H.
Crossley, A. C.
Gunston, Capt. Sir D. W.


Blair, Sir R.
Crowder, J. F. E.
Harbord, Sir A.


Boulton, W. W.
Culverwell, C. T.
Harris, Sir P. A.


Bower Comdr. R. T.
Davies, C. (Montgomery)
Haslam, Henry (Horncastle)


Braithwaite, Major A. N. (Buckrose)
De la Bère, R
Haslam, Sir J. (Bolton)


Briscoe, Capt. R. G.
Denman, Hon, R. 0,
Hely-Hutchinson, M. R.


Broadbridge, Sir G. T.
Despencer-Robert3on, Major J. A. F.
Heneage, Lieut.-Colonel A. P.


Brocklebank, Sir Edmund
Doland, G. F.
Hepburn, P. G. T. Buchan-


Brooke, H, (Lewisham, W.)
Dorman-Smith, Col. Rt. Hon. Sir R. H.
Hepworth, J.


Brown, Rt. Hon. E. (Leith)
Drewe, C.
Higgs, W. F.


Browne, A. C. (Belfast, W.)
Dugdale, Captain T. L.
Hogg, Hon. Q. McG.


Bullock, Capt. M.
Duncan, J. A. L.
Holdsworth, H.


Burgin, Rt. Hon. E. L.
Edge, Sir W.
Holmes, J. S.


Butcher, H. W.
Edmondson, Major Sir J.
Howitt, Dr. A. B.


Cartland, J. R. H.
Ellis, Sir G.
Hudson, Capt. A. U. M. (Hack., N.)


Carver, Major W. H.
Emmott, C. E. G. C
Hume, Sir G. H.


Cary, R. A.
Entwistle, Sir C. F.
Hunter, T.


Cayzer, Sir C. W. (City of Chester)
Errington, E.
Hutchinson, G. C.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Erskine-Hill, A. G.,
Jarvis, Sir J. J.




Jones, Sir G. W. H. (S'k N'w'gtn)
Owen, Major G.
Spears, Brigadier-General E. L.


Junes, Sir H. Haydn (Merioneth)
Peat, C. U.
Spens, W. P.


Jones, L. (Swansea W.)
Pickthorn, K. W. M.
Stanley, Rt. Hon. Oliver (W'm'l'd)


Kerr, H. W. (Oldham)
Ponsonby, Col. C. E.
Stewart, J. Henderson (Fife, E.)


Kerr, Sir John Graham (Sco'sh Univs.)
Porritt, R. W.
Strauss, H. G. (Norwich)


Kimball, L.
Pownall, Lt.-Col. Sir Assheton
Strickland, Captain W. F.


Lamb, Sir J. O.
Procter, Major H. A.
Stuart, Hon. J. (Moray and Nairn)


Leech, Sir J. W.
Radford, E. A.
Sueter, Rear-Admiral Sir M. F


Lees-Jones, J.
Raikes, H. V. A. HI.
Tasker, Sir R. I.


Leighton, Major B. E. P.
Ramsay, Captain A. H. M.
Tate, Mavis C.


Levy, T.
Ramsden, Sir E.
Thomas, J. P. L.


Liddall, W. S.
Rankin, Sir R.
Thomson, Sir J. D. W.


Lindsav, K. M.
Rathbone, Eleanor (English Univ's.)
Thorneycroft, G. E. P.


Lloyd, G. W.
Remer, J. R.
Thornton-Kemsley, C. N.


Loftus, P. C.
Roberts, W. (Cumberland, N.)
Touche, G. C.


McCorquodale, M. S.
Ropner, Colonel L.
Train, Sir J.


Mat Donald, Rt. Hon. M. (Ron)
Rosbotham, Sir T.
Tryon, Major Rt. Hon. G. C.


McKie, J. H.
Ross Taylor, W. (Woodbridge)
Wakefield, W. W.


Magnay, T.
Rothschild, J. A, de
Wallace, Capt. Rt. Hon. Euan


Maitland, Sir Adam
Rowlands, G.
Ward, Lieut.-Col. Sir A. L. (Hull)


Makins, Brigadier-General Sir Ernest
Royds, Admiral Sir P. M. R.
Warrender, Sir V.


Manningham-Buller, Sir M.
Ruggles-Brise, Colonel Sir E. 
Waterhouse, Captain C.


Margesson, Capt. Rt. Hon. H. D. R.
Russell, Sir Alexander
Watt, Lt.-Col. G. S. Harvie


Markham, S. F.
Salmon, Sir I.
Webbe, Sir W. Harold


Mason, Lt.-Col. Hon. G. K. M.
Salt, E. W.
Wells, Sir Sydney


Meller, Sir R. J. (Mitcham)
Sanderson, Sir F. B.
Whiteley, Major J. P. (Buckingham)


Mellor, Sir J. S. P. (Tamworth)
Schuster, Sir G. E.
Williams, C. (Torquay)


Mills, Sir F. (Leyton, E.)
Seely, Sir H. M.
Williams, H. G. (Croydon, S.)


Mills, Major J. O. (New Forest)
Selley, H. R.
Willoughby de Eresby, Loral


Moreing, A. C.
Shaw, Captain W. T. (Forfar)
Wise, A, R.


Morgan, R. H. (Worcester, Stourbridge)
Shepperson, Sir E. W.
Wolmer, Rt. Hon. Viscount


Morris-Jones, Sir Henry
Shute, Colonel Sir J. J,
Womersley, Sir W. J.


Morrison, G. A. (Scottish Univ's.)
Simon, Rt. Hon. Sir J. A.
Wood, Rt. Hon. Sir Kingsley


Morrison, Rt. Hon. W. S. (Cirencester)
Smith, Bracewell (Dulwich)
Wragg, H.


Munro, P.
Smith, Sir R. W. (Aberdeen)
Wright, Wing-Commander J. A. C.


Nall, Sir J.
Smithers, Sir W.
York, C.


Neven Spence, Major B. H. H.
Snadden, W. McN.



Nicolson, Hon. H. G,
Somervell, Rt. Hon. Sir Donald
TELLERS FOR THE AYES.—


O'Connor, Sir Terence J.
Somerville, Sir A. A. (Windsor)
Lieut.-Colonel Kerr and Captain


Orr-Ewing, I. L.
Southby, Commander Sir A. R. J.
McEwen.




NOES.


Adams, D. (Consett)
Hardie, Agnes
Price, M. P.


Adams, D. M. (Poplar, S.)
Henderson, A. (Kingswinford)
Pritt, D. N.


Adamson, W. M.
Henderson, J. (Ardwick)
Richards, R. (Wrexham)


Ammon, C. G.
Henderson, T. (Tradeston)
Ridley, G.


Anderson, F. (Whitehavtn)
Hills, A. (Pontefract)
Riley, B.


Banfield, J. W.
Hollins, A.
Ritson, J.


Barnes, A. J.
Hopkin, D.
Robinson, W. A. (St. Helens)


Barr, J.
Jagger, J.
Sexton, T. M.


Beaumont, H. (Batley)
Jenkins, A. (Pontypool)
Shinwell, E.


Benn, Rt. Hon. W. W.
Jenkins, Sir W. (Neath)
Silkin, L.


Benson, G.
Johnston, Rt. Hon. T.
Silverman, S. S.


Bevan, A.
Jones, A. C. (Shipley)
Simpson, F. B.


Broad, F. A.
Jones, J. J. (Silvertown)
Smith, Ben (Rotherhithe)


Bromfield, W.
Kennedy, Rt. Hon. T.
Smith, E. (Stoke)


Brown, G. (Mansfield)
Kirkwood, D.
Smith, Rt. Hon. H. B. Lees- (K'ly)


Buchanan, G.
Lawson, J. J.
Smith, T. (Normanton)


Burke, W. A.
Leach, W.
Sorensen, R. W.


Cape, T.
Lee, F.
Stephen, C.


Charleton, H. C.
Leonard, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Cluse, W. S.
Leslie, J. R.
Stokes, R. R-


Clynes, Rt. Hon. J. R.
Logan, D, G.
Strauss, G. R- (Lambeth, N.)


Cove, W. G.
Lunn, W.
Summerskill, Dr. Edith


Cripps, Hon. Sir Stafford
Macdonald, G. (Ince)
Taylor, R. J. (Morpeth)


Daggar, G.
McEntee, V. La T.
Thorne, W.


Davies, R. J. (Westhoughton)
McGhee, H. G.
Tinker, J. J.


Day, H.
McGovern, J.
Tomlinson, G.


Dobbie, W.
MacLaren, A.
Viant, S. P.


Dunn, E. (Rother Valley)
Maclean, N.
Walkden, A. G.


Ede, J. C.
Mainwaring, W. H.
Watkins, F. C.


Edwards, A. (Middlesbrough E.)
Marshall, F.
Watson, W. McL.


Edwards, Sir C. (Bedwellty)
Maxton, J.
Welsh, J. C.


Edwards, N. (Caerphilly)
Messer, F.
Westwood, J.


Fletcher, Lt.-Comdr. R. T. H.
Montague, F.
Whiteley, W. (Blaydon)


Gallacher, W.
Morgan, J. (York, W.R., Doncaster)
Williams, E. J. (Ogmore)


Gardner, B. W.
Morrison, Rt. Hon. H. (Hackney, S)
Williams, T. (Don Valley)


Garro Jones, G. M.
Nathan, Colonel H. L.
Wilson, C. H. (Attercliffe)


Green, W. H. (Deptford)
Naylor, T. E.
Windsor, W. (Hull, C.)


Greenwood, Rt. Hon. A.
Noel-Baker, P. J.
Woods, G. S. (Finsbury)


Griffiths, J. (Llanelly)
Paling, W.
Young, Sir R. (Newton)


Groves, T. E.
Parkinson, J. A.



Hall, G. H. (Aberdare.)
Pearson, A.
TELLERS FOR THE NOES.— 


Hall, J. H. (Whitechapel)
Pethick-Lawrence, Rt. Hon. F. W.
Mr. Mathers and Mr. John.

Division No. 234.]
AYES.
[8.4 p.m.


Adams, D. (Consett)
Groves, T. E.
Parker, J.


Adams, D. M. (Poplar, S.)
Hall, J. H. (Whitechapel)
Parkinson, J. A.


Adamson, W. M.
Hardie, Agnes
Pearson, A.


Ammon, C. G.
Henderson, A. (Kingswinford)
Pethick-Lawrence, Rt. Hen. F. W.


Banfield, J. W.
Henderson, J. (Ardwick)
Price, M. P.


Barnes, A. J.
Henderson, T. (Tradeston)
Pritt, D. N.


Barr, J.
Hills, A. (Pontefract)
Quibell, D. J. K.


Batey, J.
Hollins, A.
Richards, R. (Wrexham)


Beaumont, H. (Batley)
Hopkin, D.
Ridley, G.


Benn, Rt. Hon. W. W.
Jagger, J.
Riley, B.


Benson, G.
Jenkins, A. (Pontypool)
Ritson, J.


Bevan, A.
Jenkins, Sir W. (Neath)
Robinson, W. A. (St. Helens)


Broad, F. A.
John, W.
Sexton, T. M.


Bromfield, W.
Jones, A. C. (Shipley)
Shinwell, E.


Brown, C. (Mansfield)
Kennedy, Rt. Hon. T.
Silverman, S. S.


Buchanan, G.
Kirby, B. V.
Simpson, F. B.


Burke, W. A.
Kirkwood, D.
Smith, E. (Stoke)


Cap., T.
Lawson, j. J.
Smith, T. (Normanton)


Charleton, H. C.
Leach, W.
Sorensen, R. W.


Chater, D.
Lee, F.
Stephen, C.


Cluse, W. S.
Leonard, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Collindridge, F.
Leslie, J. R.
Summerskill, Dr. Edith


Cove, W. G.
Logan, D. G.
Taylor, R. J. (Morpeth)


Cripps, Hon. Sir Stafford
Lunn, W.
Thorne, W.


Daggar, G.
Macdonald, G. (Ince)
Tinker, J. J.


Dalton, H.
McEntee, V. La T.
Tomlinson, G.


Davies, S. O. (Merthyr)
McGhee, H. G.
Viant, S. P.


Dobbie, W.
Maclean, N.
Walkden, A. G.


Dunn, E. (Rother Valley)
Mainwaring, W. H.
Watkins, F. C.


Ede, J. C.
Marshall, F.
Watson, W. McL.


Edwards, A. (Middlesbrough E.)
Mathers, G.
Welsh, J. C.


Edwards, Sir C. (Bedwelty)
Maxton, J.
Westwood, J.


Edwards, N. (Caerphilly)
Messer, F.
Wilkinson, Ellen


Frankel, D.
Montague, F.
Williams, E. J. (Ogmore)


Gardner, B. W.
Morgan, J. (York, W.R., Doncaster)
Wilton, C. H. (Attercliffe)


Gibson, R. (Greenock)
Morrison, Rt. Hon. H. (Hackney, S.)
Windsor, W. (Hull, C.)


Green, W. H. (Deptford)
Nathan, Colonel H. L.
Woods, G. S. (Finsbury)


Greenwood, Rt. Hon. A.
Naylor, T. E.
Young, Sir R. (Newton)


Griffiths, G. A. (Hemsworth)
Noel-Baker, P. J.



Griffiths, J. (Llanelly)
Paling, W.
TELLERS FOR THE AYES.—




Mr. Whiteley and Mr. Anderson 




NOES.


Acland Troyte, Lt.-Col. G. J.
Crooke, Sir J. Smedley
Harris, Sir P. A.


Adams, S. V. T. (Leeds, W.)
Crookshank, Capt. Rt. Hon. H. F. C.
Haslam Henry (Horncastle)


Albery. Sir Irving
Crossley, A. C.
Haslam, Sir J. (Bolton)


Alexander, Brig.-Gen. Sir W.
Crowder, J. F. E.
Hely-Hutchinson, M. R.


Allen, Col. J. Sandeman (B'knhead)
Davies, C. (Montgomery)
Hepburn, P. G. T. Buchan-


Anderson, Sir A. Garrett (C. of Ldn.)
Denman, Hon. R. D.
Hepworth, J.


Aske, Sir R. W.
Danville, Alfred
Higgs, W. F.


Assheton, R.
Despencer-Robertson, Major J. A. F.
Hogg, Hon. Q. McG.


Baillie, Sir A. W. M.
Doland, G. F.
Holdsworth, H.


Baldwin-Webb, Col. J.
Dorman-Smith, Col. Rt. Hon. Sir R. H.
Holmes, J. S.


Balfour, G. (Hampstead)
Dugdale, Captain T. L.
Hudson, Capt. A. U. M. (Hack., N.)


Balniel, Lord
Duncan, J. A. L.
Hume, Sir G. H.


Bartlett, C. V. O.
Edge, Sir W.
Hunter, T,


Beamish, Rear-Admiral T. P. H.
Edmondson, Major Sir J.
Hutchinson, G. C.


Bennett, Sir E. N.
Elliot, Rt. Hon. W. E.
Jarvis, Sir J. J.


Blair, Sir R.
Ellis, Sir G.
Jones, Sir G. W. H. (S'k N'w'gt'n)


Boothby, R. J. G.
Emrys-Evans, P. V.
Jones, Sir H. Haydn (Merioneth)


Bolton, W. W.
Entwistle, Sir C. F.
Jones, L. (Swansea W.)


Bower, Comdr. R. T.
Errington, E.
Kerr, Colonel C. I. (Montrose)


Briscoe, Capt. R. G.
Erskine-Hill, A. G.
Kerr, Sir John Graham (Sco'sh Univs.)


Brown, Rt. Hon. E. (Leith)
Evans, D. O. (Cardigan)
Kimball, L.


Browne, A. C. (Belfast, W.)
Everard, Sir William Lindsay
Lamb, Sir J. Q.


Burgin, Rt. Hon. E. L.
Fildes, Sir H.
Lees-Jones, J.


Butcher, H. W.
Fleming, E. L.
Leech, Sir J. W.


Carver, Major W. H.
Fremantle, Sir F. E,
Levy, T.


Cary, R. A.
George, Major G. Lloyd (Pembroke)
Liddall, W. S.


Cazalet, Thelma (Islington, E.)
Gibson, Sir C. G. (Pudsey and Otley)
Looker-Lampson, Comdr. O. S.


Cazalet, Capt. V. A. (Chippenham)
Gluckstein, L. H.
Loftus, P. C.


Christie, J. A.
Gower, Sir R. V.
Mabane, W. (Huddersfield)


Clarry. Sir Reginald
Grant-Ferris, Flight-Lieutenant R.
McEwen, Capt. J. H. F.


Clydesdale, Marquess of
Gridley, Sir A. B.
McKie, J. H.


Cobb, Captain E. C. (Preston)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Magnay, T.


Colfox, Major Sir W. P.
Grigg, Sir E. W. M.
Maitland, Sir Adam


Conant, Captain R. J. E.
Gritten, W. G. Howard
Makins, Brigadier-General Sir Ernest


Cook, Sir T. R. A. M. (Norfolk, N.)
Guest, Mai. Hon. O. (C'mb'rw'll, N.W.)
Mander, G. le M.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Gunston, Capt. Sir D. W.
Margesson, Capt. Rt. Hon. H. D. R.


Courthope, Col. Rt. Hon. Sir G. L.
Hacking, Rt. Hon. Sir D. H.
Meller, Sir R. J. (Mitcham)


Craven-Ellis, W.
Harbord, Sir A.
Mellor, Sir J. S. P. (Tamworth)







Moreing, A. C.
Ruggles-Brise, Colonel Sir E. A.
Thorneyoroft, G. E. P.


Morgan, R. H. (Worcester, Stourbridge)
Salt, E. W.
Thornton-Kemsley, C. N.


Morris-Jones, Sir Henry
Samuel, M. R. A.
Touche, G. C.


Morrison, G. A. (Scottish Univ's.)
Sanderson, Sir Ft B.
Wakefield, W. W.


Morrison, Rt. Hon. W. S. (Cireneester)
Schuster, Sir G. E.
Wallace, Capt. Rt. Hon. Euan


Neven-Spence, Major B. H. H.
Scott, Lord William
Ward, Lieut.-Col. Sir A. L. (Hull)


Nicolson, Hon. H. G.
Seely, Sir H. M.
Warrender, Sir V.


O'Connor, Sir Terence J,
Selley, H. R.
Waterhouse, Captain C.


Orr-Ewing, I. L.
Shaw, Captain W. T. (Forfar)
Watt, Lt.-Col. G. S. Harvie


Owen, Major G.
Shepperson, Sir E. W.
Wayland, Sir W. A.


Petherick, M.
Simon, Rt. Hon. Sir J. A.
Webbe, Sir W. Harold


Pilkington, R.
Smith, Bracewell (Dulwich)
Wedderburn, H. J. S.


Ponsonby, Col. C. E.
Smithers, Sir W.
Wells, Sir Sydney


Pownall, Lt.-Col. Sir Assheton
Somervell, Rt. Hon. Sir Donald
White, H. Graham


Prester, Major H. A.
Southby, Commander Sir A. R, J.
Williams, Sir H. G. (Croydon, S.)


Radford, E. A.
Spears, Brigadier-General E. L.
Willoughby de Eresby, Lord


Raikes, H. V. A. M.
Stewart, J. Henderson (Fife, E.)
Wise, A. R.


Ramsden, Sir E.
Stourton, Major Hon. J. J
Womersley, Sir W. J.


Remer, J. R.
Strauss, H. G. (Norwich)
Wragg, H.


Roberts, W. (Cumberland, N.)
Strickland, Captain W. F.
Wright, Wing-Commander J. A. C.


Ropner, Colonel L.
Stuart, Rt. Hon. J. (Moray and Nairn)
York, C.


Rosbotham, Sir T.
Sutcliffe, H.
Young, A. S. L. (Partick)


Ross Taylor, W. (Woodbridge)
Tasker, Sir R. I.



Rowlands, G.
Tate, Mavis C.
TELLERS FOR THE NOES.—


Royds, Admiral Sir P. M. R.
Thomson, Sir J. O. W.
Mr. Grimston and Mr. Munro.

Proposed words there inserted in the Bill.

CLAUSE 17.—(Explanation and amendment of paragraph (6) of Second Schedule to the Finance Act, 1936.)

8.11 p.m.

Sir Alan Anderson: I beg to move, in page 17, line 43, at the end, to insert:
(3) Nothing in this Section shall impose on any bank the obligation to furnish any particulars of any ordinary banking transactions between the bank and a customer carried out in the ordinary course of banking business, unless the bank has acted or is acting on behalf of the customer in connection with the formation or management of any such body corporate as is mentioned in paragraph (b) of Sub-section (2) of this Section or in connection with the creation, or with the execution of the trusts, of any such settlement as is mentioned in paragraph (c) thereof.
Following the very intricate Clauses and the learned discussions that we have had, this Clause is simple and the Amendment is, I think, easily intelligible to everyone. In fact, when we get to Clause 17 we have passed from the difficult points of accountancy and from the subjunctive mood, of which my hon. Friend complains, to the indicative. The object of the Clause is an obvious one with which we should all agree. We are gunning for our ingenious fellow citizen who escapes paying his proper share of taxes by foreign avoidance. What is foreign avoidance is laid down clearly in Subsection (2, b) and (2, c) and the last paragraph on page 17. At the beginning of the Clause the information which the Commissioners are empowered to ask for is neither definite nor specifically related to the object of the Clause. It is, in

fact, unlimited in scope and in incidence. In Clause 17 (1, a) the particulars that a person must furnish include particulars as to transactions with respect to which he is or was acting on behalf of others. A person, of course, includes a banker, so that means that a banker must furnish particulars about any transactions with any of his customers, whether the customers had any connection at all with this foreign avoidance or not. We all agree that powers are necessary to enable the Special Commissioners to get the information required to bring down this elusive quarry and I hope the House will feel that the powers in my Amendment meet the case.
It appears to my hon. Friends and me that, by accepting the Amendment, the powers at the beginning of the Clause will precisely agree with the objects at the end of the Clause. My Amendment says:
.… unless the bank has acted or is acting on behalf of the customer in connection with the formation or management of any such body corporate.…
So I submit that all the possible cases in which this Clause would be in operation are covered by the words in the Amendment as to the information that the banker supplies. If, as I hope, the House accept that view, that finishes what I have to say, except on one point, and that one point concerns, not bankers alone, but all of us. We are all sometimes ill, in mind, body, or estate, and when we are ill we resort to a doctor, solicitor, or banker, and it is of enormous importance, I submit, to all of us that we should have full confidence in the secrecy of those whom we trust with the story of our complaints. It is not possible in the public interest to


allow that secrecy to be absolute. Occasions arise when we must impinge upon it and break it down, but I beg the House to see, when an occasion arises, as under this Clause, to make a breach in the secrecy which the banker observes, and properly observes, towards his customer, that that breach should be limited to the time and the point at which the public requires that information.

Mr. Holmes: I beg to record the Amendment.

8.17 p.m.

The Solicitor-General (Sir Terence O'Connor): When I spoke on this Clause on the Committee stage I pointed out to the Committee that it was purely a declaratory Clause and that it was to remove certain misapprehensions that seemed to exist on the part of taxpayers. Taxpayers were asking that they were to be judges in their own cases as to whether there was anything they could be called on to disclose, and so forth. The object of the Clause is, of course, to enable the Treasury to obtain information in the case of transfers of assets to corporations abroad. I agree with the case that has been made by the hon. Member for the City of London (Sir A. Anderson), and I have the authority of my right hon. Friend to accept this Amendment. The House will, I am sure, agree that his complaints are well founded. As the Clause is drawn at present, we should be enacting as a declaration that a person must furnish particulars
as to transactions with respect to which he is or was acting on behalf of others.
Of course, that is extremely wide, far wider than is necessary to obtain information about transactions which involve the transfer of assets abroad, and it is wide enough to cover all ordinary banking transactions. It was never intended that we should seek such powers. Such powers have never been invoked under the Act which this Clause is intended to clarify, and the words that appear in my hon. Friend's Amendment ensure that it will be limited to the class of cases with which we are really trying to deal. If the House will look at the Amendment, they will see that, whereas the ordinary transactions of a banker with his customer are protected, transactions in the ordinary Section 21 case—that is, the case where a company incorporated outside the United Kingdom would be a Section 21 case if it had been incorporated inside the United Kingdom,

or in the case of a settlement resulting to payment to persons outside the United Kingdom—each of those cases, which are the mischief which we want to get at, is carefully safeguarded, so that that information can be obtained. This Amendment, for which my right hon. Friend is much obliged, will in fact limit the Clause to the scope which it was intended to cover and, at the same time, will completely safeguard the position.

8.21 p.m.

Mr. Pritt: The history of this House is littered with special legislation having a very tender regard for the interests of bankers. Bankers control our lives outside this House, bankers control our lives inside this House, and the spectacle of the Solicitor-General immediately surrendering to the banking interests is not new any more than the spectacle of a dog fighting a man is new. It is exactly what we expect, exactly what we have to endure for a few years longer. But this particular instance is really a pretty broad one, and I will not use any stronger phrase than that. The first comment that would naturally occur to anybody who approached this question objectively and without suffering from the delusion, as I do, that bankers get a good deal of their own way, would be that surely this Subsection is unnecessary, because if the rest of the Clause as it stands is properly drawn, there would not be anything to impose on a bank or on anybody else any unreasonably wide obligation of disclosure, and, therefore, why take this extra special precaution to see that bankers do not disclose anything?
It is perfectly true, of course, that bankers and their more important customers are naturally engaged for a very large part of their time in transactions which can hardly see the light of day without the gravest damage to a great' many sacred interests and the enlightenment of the working classes as to what is really going on, but when one comes to look a little further, having first said to oneself, presumably, that the Clause, properly drawn, will not impose any obligation on anybody, bankers or anybody else, that is not really proper and reasonable for the protection of the Revenue and the more honest section of the taxpayers, one is at once met by the most ingenious explanation by the Solicitor-General, who, I was going to say, exposed


his flank to the criticism, only that is not a happy metaphor for one of my physical build to use, but he does expose his flank, because this is the way he puts it. He will forgive me for parodying the argument, but this is really what it is: He says, "Oh, well, you see, the truth is that if you look at Clause 17, Sub-section (1, a), you find the phrase:
'as to transactions with respect to which he is or was acting on behalf of others,'
and," he says, "that is so wide that it becomes right and proper to protect the banker by putting in a limitation for the banker." Was there ever a more revealing confession than that? I have no doubt—I have not looked it up—that when the Clause itself was before the House some anxious Tory pointed out that it was wide, and the Chancellor, or one of the Law Officers, probaly pointed out that it was necessary to keep it wide, because to deal with the gentlemen representing the more important constituents of hon. Members opposite, you have to have wide Clauses. Now, when the order has come down from the banking community on the back bench, it is immediately said that Clause 17 (1, a) is so wide that you have to have protection for bankers. Let the House see where that leads. If Clause 17 (1, a) is too wide the logical thing to do is to narrow it, but the Government come along and say "Clause 17 (1, a) is so wide that it really works an injustice upon the principles of everyone who is called upon to give information about what their agents are doing," and so everybody is left suffering from the injustice except the banker.
This is usually the one period of the Session when the Treasury Bench, which really knows that it has to get money in from the rascals who keep the Government in office, and Members on this side of the House, are working together to a certain extent to try to make a Bill a good one, and we have often been told for what it is worth that our efforts have helped and we are glad of it. But here the Government get up and say, "Yes, we have drawn the Clause badly, it works injustice, injustice is intolerable and so we must insert a Sub-section to save from injustice"—whom? The common people? No, the bankers. And so once again the bankers are the only people in

this country to be protected. I ask the House to say either that Clause 17 (1, a) is right, in which case let it stand, and let us say that we will not protect the English equivalent of the 200 families by putting in a special Sub-section at their orders, or to say that Clause 17 (1, a) is wrong, in which case it should be put right.
There are one or two other points which can be made about it. Unless I am very much mistaken the ordinary litigant can compel a banker, under the Bankers' Books Evidence Act—another Act passed for the benefit of bankers but in days when they were less grasping and did not mind some obligations—to disclose the particulars of ordinary banking transactions between a bank and a customer for the purpose of evidence in litigation. What will be the position if this Clause is passed with this addition? It will not only be a declaration that there is a grave injustice in Clause 17 (1, a) and that the whole of the public must put up with it, though the bankers must be protected, but there will be the ingenious anomaly that if all you want is proof in litigation that some transaction of some kind was carried through you may have it from the bank, but that if you want proof from a bank's books that not an ordinary litigant, but a gentleman who ought to be made a litigant by the Crown, has tried to "welsh" his fellow citizens by not bearing what even a Conservative Government calls his fair share of taxation, you cannot ask the bank for the information at all.
The hon. Member for the banking community who introduced this Amendment said that it was very important to retain what I think he called the father-confessor position. I am sorry to have misrepresented his position; he represents the City of London. He said it was in the public interest that the position of the father-confessor should be recognised and that people should be protected from disclosure. I am content that the bankers should be put on exactly the same footing in this respect as father-confessors are—they make a strange company, I agree—but father-confessors have no protection in law from disclosing matters which they have learned, and bankers should not have it either. There is, of course, a well-known branch of privilege—the privilege of lawyer Their clients have already


been reasonably tenderly dealt with in Sub-section (2). But most Members of the House will remember that the privilege always stops at fraud, and if the type of transaction which this Clause and other Clauses here which we support are aimed at is not fraud I do not know what it is. If there were to be any special protection at all it ought to be a special protection, very carefully safeguarded, to show that it was not going to protect from disclosure particulars of banking transactions which were carried on in any manner to assist in an evasion of the provisions of this Finance Bill or any Finance Act.
That brings me back to the point I was dealing with earlier, that if Clause 17 were properly drawn—and I do not see anything wrong with Clause 17 (1,a)— there would not be anything in it except what dealt properly with evasion of tax, and consequently the only information which it would be relevant to obtain from anybody, banker or otherwise, would be information about such evasion, and in

that case the proposed new Sub-section would be useless. As it stands, the only defence advanced for it by the Government is that they drafted their own legislation so badly that everybody ought to have special protection under it; but it is the bankers alone who are to have it. The hon. Member who introduced it said that it was pretty simple. I confess that nothing which he said made it seem simpler to me, but I do not think it is very complicated, and I suggest that it would be a great pity in a branch of legislation where, on the whole, the rascal does not get it all his own way—and by rascal I mean the gentleman paying a great deal less taxation than in fairness he ought to pay—to add one more to the long list of provisions which put the bankers above the community, above ordinary litigants and above the father-confessor.

Question put, "That those words be there inserted in the Bill."

The Committee divided: Ayes, 181; Noes, 130.

Orders of the Day — MINISTRY OF SUPPLY BILL.

Order for Consideration of Lords Amendments read.

Motion made, and Question, "That the Lords Amendments be now considered," put, and agreed to [Mr. Burgin.]

Lords Amendments considered accordingly.

CLAUSE 2.—(General powers of Minister.)

Lords Amendment: In page 3, line 4, at the end, insert:
and, without prejudice to any powers transferred or made exercisable as aforesaid, the powers of the Minister under this Sub-section of manufacturing or otherwise producing articles shall not be exercised after the expiration of a period of three years beginning with the date of the passing of this Act, except in respect of such classes of articles as His Majesty may specify by Order in Council made not earlier than the commencement of the last six months of that period.

Mr. Deputy-Speaker (Sir Dennis Herbert): I have to point out that this Amendment raises a question of Privilege.

8.44 p.m.

Mr. Burgin: I beg to move, "That this House doth agree with the Lords in the said Amendment."
While the Bill was in another place, two Amendments were made in it with my consent, one to fulfil an undertaking given to this House and the other to deal with a more substantial point which I should like, in a few words, to explain. When the Ministry of Supply Bill was drafted, it was felt, in view of the fact that the Military Training Bill was limited to a period of three years, that the more exceptional powers proposed to be given to the new Minister should themselves be limited to a duration of three years. Consequently the Bill was divided into two parts, and the second part was made temporary, limited to three years. Then came the question how much of the Bill should be in the permanent structure of the Ministry, and Clause 2, which is the main operative Clause, giving the Minister power to buy, acquire, manufacture, produce, store and transport, was

put into the permanent part of the Ministry. The object of the Bill is to enable the new Minister effectively to see to the supplying of the aimed forces of the Crown, and to provide for whatever may be their needs. The object is not to introduce State trading by a back door; nor is it intended to give to the Ministry of Supply power to compete with established industries. It is intended to give to the Minister power to supply the armed forces of the Crown.
It is not easy to set out in detail what powers of manufacture are possessed by the Defence Services, and, in order to be perfectly certain that during an emergency the powers of the Ministry should not in any way be curtailed, Clause 2 was originally drafted in very wide terms, giving the power to manufacture without limit articles required for the public service. In another place it was suggested that probably the powers of manufacture possessed by the Defence Services themselves would prove sufficient to enable the new Minister to fulfil every need of the Defence Services. I am unable tosay whether that will be the case or not, and, therefore, I desire to have power to manufacture over and above whatever powers the existing Defence Services now possess.
This Amendment—a Government Amendment made in another place—does two things. It enables the powers of any Defence Service that have been transferred to the Minister to be exercised indefinitely, without any limitation of time, but it says that, for manufacturing powers other than those possessed by a Department of State at the present time, there shall be a limit of three years. In order, however, to prevent a factory which is in existence and is making goods that are essential to the State from suddenly being obliged, by the mere arrival of a calendar date, to shut down, there is a further provision that it shall be open by Order-in-Council to continue the manufacture, even outside the rights of manufacture now possessed by Government Departments, of such classes of articles as may be specified in the Order-in-Council; and the Order-in-Council is not to be made for 2½ years. In the event of the House accepting my suggestion that this Amendment can safely be agreed to, the result would be that the Minister of Supply would have all the powers to manufacture which are possessed by any Government Department whose powers


are transferred by Order-in-Council. For instance, that would include all the Royal Army Ordnance Factories, Woolwich Arsenal, and every factory put up by the War Office, making almost every conceivable thing one can think of, in connection with the armed forces of the Crown; while, in addition, for three years one would have power to manufacture any articles required for the public service without limit.

Mr. Dalton: The right hon. Gentleman has taken the illustration of what the War Office can do. Would he explain what the Air Ministry might be permitted to do?

Mr. Burgin: Certainly. I was taking the War Office because it will be within the recollection of the House that it is proposed that the first Order-in-Council should be primarily concerned with the War Office. I was merely taking that as an example; by all means I will take the other Departments of State in their turn. One would be able to manufacture, without limit of time, anything which can now be made by the War Office; and one would be able to manufacture for three years any other articles required for the public service without any limit at all, and would be able to continue beyond the three years manufacturing without limit any of the articles specified in an Order-in-Council, which, however, would not be made until 2½years from the passing of the Act. I wanted first to give an analytical explanation to the House, and then to argue it later.
I was asked what would the Air Ministry have power to make. I will begin by saying that it is not simple to state with any degree of precision what manufacturing powers are possessed by Government Departments at the present time. I know of no limit, in the case of the Air Ministry, to manufacture anything required for the aircraft of the country. [Interruption.] I do not want to accept the word "military"—

Mr. Montague: Was the right hon. Gentleman present during the Debate last night?

Mr. Burgin: Certainly, but I do not think that has any reference at all to what I am saying. If I understand the interjection correctly, an undertaking was

given by the Secretary of State, in connection with the amalgamation of Imperial Airways and British Airways, that he was not proposing to manufacture civil aircraft; but we are talking now about powers, not about the exercise of powers, and I am saying that I am not personally aware of any limitation on the Air Ministry in regard to manufacture. I am endeavouring to speak extremely accurately and clearly to the House, because I have tested my own inquiries as to whether there were any particular kinds of scientific instruments which conceivably might not fall within the powers of manufacture. I am not aware of any; so far as I know, the Air Ministry have power to manufacture anything that is wanted for the Air Defence and counterattack of the country. With regard to the Navy, hon. Members will hardly require any description by me of what the Navy has power to build. Therefore, if I were asked conscientiously to give an instance where I thought the powers of manufacture possessed by the State Departments fell short of anything that the country would require, I should be unable to give an instance, and it was ex abundante cautela that I put into Clause 2 of the original Bill power to manufacture without limit, in order that one should not be, during an emergency, in the ridiculous position of suddenly finding that by reason of some invention, some entire change of circumstances, there might possibly be some new article or substance or chemical compound as to which there was some doubt whether any Government Department possessed the right to manufacture it.
If the House accept this Amendment, as I invite them to do, the Minister of Supply will be left with all the powers which he thinks are necessary, because he has all the powers that existing Government Departments possess, he has in certain cases an unlimited power for three years, and he has power himself to define, at the end of 2½ years, what powers of manufacture he desires to continue indefinitely, even after the expiration of the period of three years. Let it be clearly understood that I think the temper of the country is that those powers should be large, and that curtailment of powers, if they interfere in any way with the Minister's efficiency, would be regrettable. But it would be a mistake to read into the words meanings which the words do


not themselves carry. This House has not been invited to pass this Bill for the purpose of giving the Minister power to run a farm or to run any establishment outside what the Bill provides.

Mr. Ellis Smith: Why have you put that interpretation on it?

Mr. Burgin: I have been asked whether I have any desire to use powers in that direction, and I have naturally and conscientiously replied, "No." I want power to use these powers for three years, and power to see, at the end of the three years, which of the powers I want to use indefinitely. This Amendment gives me all those powers.

Mr. Kirkwood: Is this the Amendment which you and I heard Lord Gainford move in another place?

Mr. Burgin: The hon. Member is right in saying that in another place an Amendment was moved. This is the Government Amendment to give effect substantially to what was moved, but in such a way as not to curtail the powers of the Minister of Supply, and to give him the powers he requires.

8.58 p.m.

Mr. Dalton: My hon. Friends will oppose this Amendment, and carry it to a Division. We regard this as the most reactionary and unjustified Amendment to the Bill. The history of the Bill is that it took a long time to get the Government to introduce it, they have had to be pushed every inch of the way, and at frequent stages they have failed to respond to what the right hon. Gentleman has correctly said is the temper of the country, that the powers of the Ministry should be large. This is another instance of diminution of powers which, in our view, are not too large. It would be out of order for me to recapitulate criticisms which have been made on the earlier stages of the Bill, but on a number of detailed points we have urged that powers should be strengthened rather than weakened. Here is a case where, although the temper of the country is that powers should be large, the temper of another place is that they should be restricted.

Mr. Burgin: In point of time.

Mr. Dalton: I am going to say a word about "in point of time "as I see it. Representatives of private interests are

desirous to see restrictions, superficially in point of time, but, in fact, imposed to prevent power being exercised, if the Minister should think fit, for the provision of requirements of National Defence. The Minister was careful, as a lawyer, to exercise some caution when he was telling the House what might and what might not, under his permanent powers, be manufactured through his agency. He said, when I asked him about the Air Ministry's transferred powers, that he was not aware of any limitation which would be imposed on him in that respect, but I gathered that he would not be surprised if there were to be debate between lawyers after the Bill is passed as to how far those powers extend. Under this Clause, if the Amendment were rejected, the distinction between the two classes of powers would not emerge. The Minister has full and satisfactory power
to buy or otherwise acquire, manufacture or otherwise produce, store and transport any articles required for the public service ….
That is reasonably satisfactory to my hon. Friends and myself, but now we have this limitation imposed. Although the Minister is not aware of such limitations, they might afterwards become evident to him. Therefore, in passing this Amendment we should be giving hostages not only to private enterprise but also to the legal profession, in regard to what might subsequently transpire. Why has it been demanded in another place, by spokesmen of private industry, that this limitation shall be imposed? It is because they fear that, as the powers now stand, the Minister may embark upon extensions of public enterprise and public manufacture, desirable from the point of view of the Minister, in the interests of national Defence, but undesirable from the point of view of those who want to make private profit out of supplying the necessities of their country. This Amendment has been crudely and blatantly passed from a desire to restrict the sphere of production for use and to extend the sphere of production for profit. Therefore, it raises, in the clearest possible way, the conflict of view between my hon. Friend and those forces which stand on guard behind the right hon. Gentleman, carefully watching lest his foot should slip even an inch or two in the direction of Socialism. [Interruption.] They are in the guardroom in another part of the building.
The right hon. Gentleman, desiring to put at its minimum the significance of this Amendment, said that it was a restriction only in point of time. Let us look at it from a practical business point of view. With this limitation, is it to be expected that the Government will set up, even if it is necessary for national Defence, substantial new plant and instal expensive machinery in newly-constructed factories, in order to produce requirements for the nation, if at the end of 2½ years these new installations will have to be abandoned altogether or sold to private enterprise? The right hon. Gentleman understands the line of argument I am following.

Mr. Burgin: I cannot myself think of an article which cannot at present be manufactured by one of the Defence Services. Will the hon. Gentleman be good enough to give one or two examples when he talks of a hesitation to manufacture goods or instal machinery? If there is any doubt about the fact, that power will be one of those which are inserted in the Order in Council to be continued indefinitely. I am endeavouring to secure the powers that are wanted, but there are quite obviously a number of powers that I do not desire to possess. The hon. Member appreciates that the three years period applies to all my priority powers already. We are talking of manufacture, but I have to regard it in the framework of the Bill. The three years period will be no greater handicap to me than the deprivation of the powers of priority, which are left to this House in another capacity to extend year by year. Perhaps the hon. Member can give some examples.

Mr. Dalton: I shall endeavour to suggest one or two, although the right hon. Gentleman, seated in his Department, has a much better opportunity of imagining such articles which I have been called upon at short notice to illustrate. It will not rest with this House—and this is one of the main points I am placing against the Amendment—to determine whether or not these powers should be continued. If an Order-in-Council is required to be laid, it must receive the approval of both Houses, and at the end of the passage the same forces which have imposed this Amendment upon the right hon. Gentleman may obstruct and refuse an Order-in-Council at the end of two and a half years.

Therefore, we take the very greatest objection to the Amendment.
You, Mr. Deputy-Speaker, have drawn our attention to the fact that this Amendment is technically an invasion of Privilege. I judge that what has been done in another place is seriously to limit the powers which this House proposed to give to the right hon. Gentleman and his successors in office in order to retain for themselves the right of veto to be imposed two and a half years hence or subsequently on any Order-in-Council proposed to be passed. Who knows what will be either the international or political situation two years hence? Who knows how long this strain of rearmament will continue? What prudent person will dare to limit it to two and a half or three years, or say whether on the benches opposite there will not be a Government towards which persons in a majority in another place may not take a much more hostile attitude than they take towards the present Government? My hon. Friends are not disposed to hand over to the denizens of another place two and a half or three years hence the power further to limit the provisions which in our judgment should be made for National Defence.
I have been asked for examples, and I offer these two tentatively. There are many chemical substances which might be described as all but armaments required for explosives and other purposes. Sulphuric acid may not be manufactured upon any great scale within any of the present manufacturing powers of the three Defence Services. I should doubt it. I offer that as one example of a considerable class of chemical substances which I should expect, looking at it from the best knowledge I can command, to fall definitely outside the powers now residing in any of the three Defence Services. The second example of a somewhat different kind is taken from the right hon. Gentleman's own speech. Certain classes of scientific instruments are not perhaps primarily armaments, but he himself expressed a certain hesitation and doubt when I asked him about the Air Minister's powers, whether certain scientific instruments might not lie on the borderline of what was and what was not within the powers of the Department of the present Minister.
These are two illustrations given on the spur of the moment in response to the


right hon. Gentleman's request, and I have no doubt that on further reflection and research he could multiply the number considerably. I can imagine substances and instruments which are useful and may, in some respects, be necessary for armaments or use on armaments, but which are not exclusively or predominantly of a military character. In regard to all that class of objects and articles, I think that the powers of the Minister will evaporate at the other end of the passage 2½ years hence.
I have tried to illustrate in little detail the general reason why we are not disposed to accept the Amendment without protest and without an adverse vote. I now come back to the point I was dwelling upon when the right hon. Gentleman intervened. I was suggesting to him that examples could be found of commodities which he can produce only within this limited period of time, unless we are to assume that an Order in Council is to be forthcoming at the end of the period. I have given reasons why we can make that assumption. If that is so, it would seem a very rash thing for the technical advisers of the right hon. Gentleman to embark upon the manufacture in different establishments of any of these commodities because at the end of 2½years it may well be that extensive plant, establishments and machinery will have been set up under public ownership. If an Order in Council to continue these processes of manufacture is not forthcoming these factories or plants will have to be closed down altogether or sold at knock-down prices to the same persons who have imposed this Amendment upon the Government in another place. Therefore, on the ground of principle and of practical efficiency, the Amendment appears to be thoroughly retrograde, and I trust that the House will go into the Division Lobby and vote against it.

9.12 p.m.

Sir H. Williams: I have listened to the hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) describe this Amendment as reactionary, but I believe that the stable from which it came was that of the Federation of British Industries. [HON. MEMBERS: "Hear, hear."] There is no reason to get excited about it. I happen to be a member of the Executive Committee of that body, but, despite that fact, I had not the faintest

idea that my Noble Friend Lord Gainford was going to move an Amendment in another place. But actually the Amendment was moved by the Government. We must not let ourselves be influenced by phrases and prejudices that all things suggested by the Trades Union Congress must be wrong and that all things suggested by the Federation of British Industries must be right, or vice versa. I was very interested the other day to hear the hon. Gentleman the Member for Dumbarton (Mr. Kirkwood) suggest that the plant in the Royal dockyards was inferior to that in private dockyards, and that he thought that ships could be better built by his constituents.

Mr. Kirkwood: I am glad to have this opportunity of explaining the matter to the House. On two different occasions during the last six months I have put down questions regarding the obsolete machinery that is in the Royal dockyards—machinery which is not capable of meeting the demands at the moment. I was not bolstering up private enterprise as against Government dockyards, but the very opposite.

Sir H. Williams: I am very glad that the hon. Gentleman has said that, and I entirely agree with him that it is all wrong that Portsmouth, Woolwich, Devonport, Chatham, and Sheerness should have rotten plant compared with plant which the hon. Gentleman himself admitted is in the private yard of John Brown and Company, Limited. Of course, the plant is rotten in Government dockyards. What do you expect? I remember that when the Great War broke out one Government factory had machinery which was installed at the time of the Crimean War. The hon. Member opposite, who knows a great deal about Bishop Auckland and economics but less about the running of an engineering establishment, has not had opportunities of studying Woolwich Arsenal or Portsmouth Dockyard. I remember when I was in the office of the Ordnance Store Department having a special course at Woolwich in the autumn of 1918, and part of the instruction which we were having took us into the Arsenal. I was frankly horrified at the inefficiency and idleness which I saw at a most critical time in our national history. [Interruption.]

Mr. R. J. Taylor: What did you do?

Sir H. Williams: I was suffering from the disability of wearing a uniform which for the time being did not allow one to express his views as a Member of this House is able to do. From time to time, in order to keep these naval establishments balanced and moderately busy, the Admiralty place a certain number of shipbuilding orders with the Royal Dockyards and from time to time the cost of these ships is reported to the Public Accounts Committee of this House, on which I have not yet had the privilege of serving. The information is available to all hon. Members. Naturally the results vary from time to time, but the broad proposition I am going to put forward is that a ship of war built in a Royal Dockyard costs 10 per cent. more than a similar ship built by private enterprise, although the costs include a profit to the company. If you really want to waste public money you will get these munitions of war produced in Government establishments. I notice that there are not many cheers among hon. Members opposite at that statement. [Interruption.] The hon. Member who comes from Durham, where they have a lot of coal mines, is not very familiar with this problem, and therefore he is reduced to the condition of making irrelevant interruptions.

Mr. Batey: I am not speaking.

Mr. Deputy-Speaker: I must ask the hon. Member for South Croydon (Sir H. Williams) to deal with the Question before the House.

Sir H. Williams: I apologise. I was drawn away by interruptions which I frankly thought were a little irrelevant to discuss the problem of private enterprise instead of concentrating on the problem of the production of munitions in establishments under the control of the Government. The Minister is in rather a curious position. I spent two hours recently one afternoon in the Library trying to find out on what authority the Secretary of State for War ran Woolwich Arsenal at all. I found a great number of Acts of Parliament stretching back into the remote ages, 200 years ago. At that point I gave up the search, but I found an Act authorising the Ordnance Board, which preceded the Secretary of State for War, to buy land and all the rest of it, but I could not find any statu-

tory authority whereby the Secretary of State for War made guns or anything else at Woolwich Arsenal, and I came to the conclusion that the present position was a product of the institution which we call the Royal Prerogative. It had been done from the time of Henry VIII, they had always done it, and nobody had stopped the Crown from doing it. I wonder whether hon. Members opposite are as familiar with this institution as they think they are. [Interruption.] At this moment what are we discussing? We are discussing the fundamental difference between the party to which I belong and the party opposite; we are by chance engaged in a first-class challenge whether it is better to produce things under private enterprise or under State control.

Mr. Deputy-Speaker: I must point out to the hon. Member that I do not quite agree with his definition of what is under discussion.

Sir H. Williams: I apologise; I was wrong. We are discussing whether Socialism is to cease in three years' time from, now on the narrow issue of producing munitions of war. If I thought for a moment that the party opposite ever studied this problem without prejudice, my approach would be a little different. I have no direct interest, so far as I am aware, in the production of munitions, except that I happen to be associated with one company which I think has put some device for burning coal in boilers which ultimately will produce steap, which in due course will have something to do with the filling of shells. [An HON. MEMBER: "That is a good advertisement!'"] I have not mentioned the firm; not belonging to the Co-operative Society I am rather sensitive on these matters. The real issue is this. Hon. Members opposite think that they will get these things cheaper three years from now if the Minister is not checked. I take the opposite view. I hope the Minister will exercise his manufacturing powers to the smallest possible extent, and in the interest of the public purse. After all, you describe profiteering as a device whereby the capitalists charge too much for the things they sell to the State in connection with this rearmament work. It is just as much profiteering if an incompetent management allows the workmen, because their outlook is wrong and because they are employés of the State—

Mr. George Griffiths: That is a libel on the British worker.

Sir H. Williams: Whether the worker is efficient or not does not depend so much on himself as it does on the management. Management is much more important than anything else, and if as a result of the State taking too active a part in this matter the salaried officers of the State and the wage earners of the State force the State to pay too much for munitions, they are as much profiteers as any capitalist.

Mr. Montague: What is the evidence?

Sir H. Williams: I say that a ship of war built in a dockyard where no profit is involved costs 10 per cent. more than when it is built on Clydebank, and I would ask hon. Members to read the reports of the Public Accounts Committee on the point. I say that if the employés of the State soak the State 10 per cent. more than private enterprise, those employés of the State are profiteers of the worst possible character. The hon. Gentlemen opposite want profiteering to continue, provided the profiteering is for people who are directly employed by the State. Again I do not observe as many cheers as there were in the earlier part of my speech. The hon. Gentleman on the Front Bench who has himself been a Minister of the Crown in a Defence Department and who I am certain did his job very efficiently, so far as he had an opportunity, and for whom, as he knows, I have great respect, knows perfectly well that a Department of State is dilatory and incompetent. Why is it, if you write to any Minister of the Crown, that it takes three weeks to get an answer to your letter?

Mr. Montague: The hon. Gentleman knows nothing of the kind. I was much impressed by the efficiency of the particular kind of work done by the Air Ministry and I saw a great deal of it.

Sir H. Williams: I am very glad to hear that the hon. Gentleman, who had not previously much experience of that kind of administration, thought that it was very good. When I went into a Department of State—and it was quite a good one—I was not so impressed. [An HON. MEMBER: "They did not keep you there long."] It was not my fault. I was not sacked. [An HON. MEMBER: "You would like to be taken on again."]

If I send a letter to an ordinary commercial undertaking and ask them a question about a job with which they are familiar, I expect to get an answer by return of post or a day later. All the hon. and right hon. Gentlemen opposite write many letters to Departments of State. How long is it before they get an answer? They get an acknowledgment by return of post, but when do they get a real answer? In a fortnight or three weeks? [An HON. MEMBER: "That is your Government."] It was just the same when the other Governments were in. It does not make any difference who are the Ministers, so far as this is concerned. I think there is a better chance when our fellows are in because we have some idea of how to run the show, but the hon. Gentlemen opposite have not the slightest idea. Whatever Minister is in charge this remorseless Civil Service will go on being slow. Intellectually they are marvellous. We can always judge that when we have Amendments put before us. We cannot understand their meaning. They do, because they have drafted them, and those are the gentlemen you want to make munitions. I have the greatest respect for the Civil Service. They are incorruptible and patient.

Mr. Deputy-Speaker: I must warn the hon. Gentleman that unless he keeps more closely to the Lords Amendment before the House I shall have to ask him to resume his seat.

Sir H. Williams: I am terribly sorry, Mr. Deputy-Speaker, but I admit that I have wandered rather away. If the hon. and right hon. Gentlemen opposite had been a little more patient in listening to me instead of provoking me by their interruptions to say things which are out of order, I should not have incurred that rebuke, which I admit quite frankly I entirely earned and which was justified. I always respect the Chair and I apologise most sincerely for wandering astray. The real issue at stake is not very remote from what I have been saying. I was only remote because I got away from the question of manufacture in Government Departments to the status of civil servants. I am of opinion that Government Departments are inefficient in running an industrial operation. I have always held that view and I hold it to-day. I want the powers now being conferred upon the


right hon. Gentleman, for whom I have great respect and who, I am quite certain, will do his job with great competence, exercised merely for the period of difficulty through which we are passing. I strongly support the Amendment made in another place, not because the institution which prompted it has communicated with me in any way but because I have always stood from the day I was an apprentice in an engineering works against the principle that the State can run a job better than a private individual.

9.32 p.m.

Sir Stafford Cripps: May we now pass from the realms of imagination to those of facts? The hon. Gentleman has spoken a lot about his views as regards manufacturing, but his views are not related to the facts at all, and they merely arise out of the imagination of himself and the supporters of the F.B.I. I want to speak as regards the facts of the situation within my own knowledge during the last War. I was for a considerable period of time in a position of management in what was, I think, the largest Government factory in this country. It was a factory which was erected at a cost of £7,750,000. It was a factory which was destroyed at the end of the War at the request of the people who have put this Amendment on the Paper. Among other units in this factory at Queens ferry were the two finest sulphuric acid plants in the world at that time, and part of my job was to deal with the cost accounts of that factory. In order to deal with them efficiently I had access to the cost accounts of every other sulphuric acid manufacturing plant in England, France, Italy, Canada and the United States of America to compare the standard at which we were manufacturing and to see where economies could be made. We had to start with an entirely unskilled staff. Not a single person either of the management or the operatives had ever worked in a chemical or explosives factory before that factory was started up in war time. It was started up on war prices. We had to pay very heavy prices for our sulphur, which came from Sicily, owing to war insurance and freights, and for other war materials as well. Our cost figures were lower than any pre-war sulphuric acid manufacturer in this country. In fact they were so much lower that a year or two after we

had started up a deputation of the sulphuric acid manufacturers of England came to the Minister of Munitions and said, "We ask you to give an undertaking that you will destroy this factory at the end of the War as otherwise every sulphuric acid manufacturer in England goes out of business."

Colonel Arthur Evans: May I interrupt to inquire if the system of costing took into consideration the capital cost which a private enterprise would have to do?

Sir S. Cripps: Of course we did. We had a very elaborate system of cost accounts. In fact, we had a system which we inaugurated and which was afterwards adopted very largely by private enterprise which had not any cost account at all at that time. Nobel's had no cost accounts of any value that could be produced as regards that pre-war manufacture. They had accounts, of course.

Sir H. Williams: The hop. and learned Gentleman told us first that he had access to the cost accounts of all private enterprises, and then a moment later he said that private enterprises had not got them.

Sir S. Cripps: I am speaking about two things. One is a technical term, which the hon. Member for South Cardiff (Colonel Evans) called "cost accounts," and the other is "accounts of costs."

Sir H. Williams: What is the difference?

Sir S. Cripps: If the hon. Gentleman does not know the difference, it is no good trying to enlighten him now. I do not propose to give him a lecture on accountancy now, because it would not be in order, but if at some other time he likes to take some lessons, I will see what I can do. I was saying that the other manufacturers asked the Minister of Munitions whether he would consent to close down those two plants for sulphuric acid manufacture, and that consent was given; and as a result, immediately after the War, those two plants, the most efficient in the country, became derelict, and I presume that the remains of them are probably to be seen to-day on the site at Queensferry where they were put. That was a tremendous loss to the industry of this country. For the first time, oleum manufacture had been started; that is to say, a high concentration of sulphuric acid was available for sending in railway trucks to any manufacturer in the


country at a price that was very much lower than anything that could be quoted by other manufacturers. In normal times, when there was not an acute crisis or a war, would they have contemplated putting up such a factory if they knew that at the end of two and a-half years there was the danger of having to close it down as a result of pressure from these very people?

Mr. Burgin: I am sure the hon. and learned Gentleman would not wish to make a false point. I am sure it will have occurred to him that the fact that oleum and sulphuric acid were manufactured by a Government Department in war time is not without importance to me. I gather that those powers are possessed by the War Office to-day, and that when the War Office powers are transferred to me, the power to manufacture sulphuric acid would continue indefinitely and not come under the 3 years rule.

Sir S. Cripps: The point is that the War Office did not do it. The Ministry of Munitions did it. Manufacture was initiated by the Ministry of Munitions and not by the War Office. I do not know whether the War Office could have afforded such a plant merely for its own purposes; I very much doubt whether it could. I am familiar with, and have worked in, the War Office plants at Waltham Abbey and know what was done there. These were the only sulphuric acid manufacturing plants put up by the Government during the War, and they were not put up by any of the Defence Departments, but by the Ministry of Munitions. That is exactly the sort of function which, I imagine, the right hon. Gentleman is likely to perform. Suppose that he contemplates spending £2,000,000 on putting up a sulphuric acid plant in order to be ready for the very great need for sulphuric acid for the manufacture of explosives if there is a war; will he look upon that prospect as cheerfully if he thinks that the people who have put forward this Amendment are likely, at the end of 2½ years, to refuse the continuance of those powers unless the plants are handed over to private enterprise or unless, as the demand was in the last War, the plants are destroyed for the benefit of private enterprise? I venture to suggest that this Amendment has been put forward by precisely the people who took that step during the War, and who

were prepared to sacrifice, not only the convenience of other manufacturers in getting cheap sulphuric acid, but the interests of the community, which had spent that enormous sum in putting up this plant, to their own competitive interests in the sulphuric acid trade. In my view there can be no other reason for the insertion of this provision. There can be none, except giving a protection to those private interests, and it would be an absolute scandal, at a time such as this, when everybody is urgently pressing that the maximum efficiency should be developed, when the Bill itself has been brought forward by the Government because they admit at last that it is necessary in order to increase the maximum efficiency, to permit those in another place to insert a provision such as this to protect their private interests as against the interests of the community. I suggest that we should do all in our power in order to demonstrate to the people of this country that we, at least, put the public interest before private interests in these matters.

9.41 p.m.

Mr. Mander: I should like to ask for a little further information as to the history of the original Clause and the Amendment that is now before us. I assume that what happened was that, as in the ordinary course, the matter was considered in the Department, approved by the Minister, brought before the Cabinet, and found to be wholly in accordance with the strict tenets of the Conservative party; and that then it was brought before the House of Commons as being a Measure that was needed for the protection of this country in this period of emergency. A very serious charge is now being made by hon. Members opposite against the right hon. Gentleman and against the Government. It is being said that the right hon. Gentleman, belonging presumably to the more revolutionary wing of the Liberal party, associated with the revolutionary National Labour members of the Government, secretly introduced into this Measure words which were dangerously and unnecessarily of a Socialist nature. That is the charge that is really being made.
I should like to have some explanation from the Minister. Why did he originally bring forward proposals of this kind if it is now said that they possess


all the objections and dangers which those in another place say they do? Is it true that proposals which were thought necessary for the protection of the country a month ago are now wholly unnecessary? I think the Government have got themselves into a very awkward position and that we ought to have some explanation with regard to the serious charges that are made against them. In a matter of this kind, we assume that the Government, whatever Government it may be, will act in a reasonable and sensible manner, and exercise such powers as Parliament has given to them in the national interest. We all know the immense forces and pressure of capitalism and how difficult it would be for any Government to stray far from the narrow capitalist path. I find it very difficult to see the grave dangers that are visualised. I should have thought that the Government were probably right in the first instance, until they got frightened of what happened in another—

Mr. Burgin: I would point out to the hon. Member that he is under the great disadvantage of not having heard my statement.

Mr. Mander: I apologise. I am aware of a good deal of what the right hon. Gentleman said, but I say that some additional explanation is required. It seems to me that the reasonable course would be to give the widest possible powers to any Government that might be in power during such difficult days, trusting in them to act reasonably in the interests of the State.

9.45 P.m.

Mr. E. Smith: I was very pleased at the tone of the speech of my hon. Friend the Member for Bishop Auckland (Mr. Dalton) and the reasons which he put forward in opposition to this Amendment. The spirit which has been introduced into the Debate by the hon. Member for South Croydon (Sir H. Williams), is regrettable. Those of us who have had any contact with civil servants know that, generally speaking, they are as efficient as it is possible for men to be and that they carry out the policy determined by the Government which happens to be in office at the time. I am sure that my hon. Friends on this side will all associate themselves with me in deprecating the

attack which has been made by the hon. Member for South Croydon upon the civil servants. He also charged us on this side with being prejudiced. We are not prejudiced from the people's point of view. I would invite the hon. Member or any hon. or right hon. Gentleman in the House to go to the Library and ask the Librarian for a book by Mr. C. E. Lloyd, a distinguished civil servant, who has placed on record in that book his experiences during the last War. If they read that book there will be no need for any further reply to the hon. Member for South Croydon.
The hon. Member only proved that he is not familiar with modern conditions in industry. If he knew anything about the wonderful Royal Ordnance Factory which has been built at Nottingham, he would never have made the statements which he made to-night. That factor is the admiration of engineers and scientists from all parts of the world. Big industrialists, trade union representatives and workers who have had the opportunity of going round that place recognise the efficiency with which it is managed and the spirit of comradeship which exists in all grades of those engaged in it, from the managerial and administrative staffs right through to the manual workers. The spirit which animates the workers there is that they are working for the defence of the country which they hope will ultimately belong to them. That is the spirit which exists in many factories throughout the country, and the spirit which has been introduced into this Debate by the hon. Member for South Croydon is absolutely out of date. We are living in serious times, and it is wrong at such a time to introduce such a spirit into this House. We differ fundamentally from hon. Members opposite. We do not accept the present social system, but, having said that, we realise that what exists in the world to-day is a fundamental challenge to humanity as a whole, and we are prepared to sink our political differences to a certain extent, in order to support the preparations that are being made to enable the people of this country to defend themselves.
The right hon. Gentleman opposite said that this Bill was in keeping with the temper of the country. We admit that, and we say that the speech of my hon. Friend the Member for Bishop Auckland is in keeping with the spirit of the


people of the country. We hope it will only be a matter of time before the people of the country have a Government which will be really worthy of them and which will reflect the spirit of patriotism which animates the people to-day. When we have such a Government there will be no speeches from the Government benches such as that which we heard to-night from the hon. Member for South Croydon. I say without hesitation and I would like this to go down in the Official Report in bold type, that it is an unpatriotic and small minority in this country which is responsible for this Amendment. Representatives of the Federation of British Industries put forward this proposal in another place and we know the history of that body from 1918 onwards. If it were in order to do so I would be only too delighted to go into it, but there is a book coming out now called "Tory M.P." which everyone in this House ought to read. They will get the history of the Federation of British Industries in that book.
The spirit of the people is to be seen in the way in which they have received the Military Training Act, and the way in which they have rallied to the Territorial Forces. That spirit of patriotism could be harnessed behind a people's Government in this country, but at present the interests of the people are being subordinated to narrow vested interests of the kind reflected in this Amendment. You, Mr. Speaker, are considerably older than I am. I do not mean that in any uncomplimentary sense. I mean that you can remember the industrial history of this country longer than I can, but I have read sufficient of it to know that the people mainly responsible for many of the large industrial disputes, for locking-out our people in the mining industry, and for sending them out on strike, have been a small minority of coalowners. It is a small minority of that kind which is responsible for this Amendment. We younger people of today have been handed down a legacy that is worth preserving. Even within the framework of the present social system we have a better standard of social conditions and of social services than we had before, as a result of the sacrifices made by our people in days gone by. We have something worth preserving, but we would not have achieved those standards if it had depended upon the

kind of people who are behind this Amendment.
The Amendment as I say is not in keeping with the spirit of the people. If this House is to show itself worthy of the people hon. Members will unhesitatingly support my hon. Friend in the Division Lobby against the Amendment. I would like to see the House better filled on this occasion, but I put it to every hon. Member who is here that if the House is to reflect the true feeling of the country it will vote against this Amendment. I know how a proposal of this kind would be dealt with in most of the constituencies to-day, especially in the north. I am not speaking of those relatively backward places which are satisfied to be represented by ex-admirals and ex-generals and ex-colonels and people of that kind. I am speaking about the constituencies which reflect the real spirit of the country and I have no hesitation in saying that if you were to go on any platform in the north of England you would find the people, even supporters of the present Government, ready to vote against this Amendment. This Bill received a Third Reading here without opposition. It was evidently satisfactory to the Government then. But on 4th July the Federation of British Industries had been at work. A certain small section sent a letter to the Prime Minister. To the credit of a great number of Government supporters let it be said that they were not associated with that letter. But a small section had got to work by the time the Bill had gone to another place, and they introduced this restriction which we are now considering. The object is to restrict the powers of the right hon. Gentleman. The procedure by Order-in-Council will create uncertainty and in serious times like this we cannot afford uncertainty. The right hon. Gentleman should have sufficient power to defend this country, and to deal with anything right away in order that he can organise the armed forces on the basis of maximum efficiency. I hope that every hon. Member will follow us into the Division Lobby in order to show to the world the patriotic spirit of our people.

Mr. Burgin: I can only intervene again with the leave of the House.

Mr. Kirkwood: Will you wait a bit?

Mr. Burgin: I will give way to the hon. Member.

9.56 p.m.

Mr. Kirkwood: I want to say a few words on this subject. I listened to the Debate in the House of Lords and I said to the Minister of Supply, who was standing beside me, that the Lords were doing their utmost to trammel every power he had. That was the aim and object of practically every one who rose. The only one who was standing up for the right hon. Gentleman was Lord Addison. When Lord Gainford got up I said to the Minister that he was making the most reactionary speech I had heard in my visits to the House of Lords. I will just quote one or two words he said:
Industry is very much perturbed by certain permanent powers which are included in this Bill.

Mr. Speaker: If the hon. Member is quoting from a speech in the House of Lords he is out of order.

Mr. Kirkwood: Can I say what was said, as far as I can?

Mr. Speaker: The hon. Member must not quote from the speeches made in the House of Lords in order to influence debate in this House.

Mr. Kirkwood: It is very difficult. I Have heard the Members in another place quote at length speeches delivered in the House of Commons.

Mr. Speaker: I have nothing to do with that.

9.58 p.m.

Mr. Sexton: When this Bill was before the House of Commons the first part of it was referred to as the "permanent powers" part. Now we find that it is like some of the cheap permanent waves that are advertised—the curl has been taken out of it. This Amendment from the House of Lords will destroy the basis of the authority of the Minister. The Army and Navy have permanent power to manufacture, and who would scrap the existing ordnance works and Government dockyards? Is it because there is a fear of general nationalisation under Clause 2? A high legal authority has said that there is no fear of general nationalisation, or even of the nationalisation of one industry under that Clause. The fear is that of certain people outside the House who think that the Clause may introduce Socialism. Fancy anybody being afraid of the National Government introducing

Socialism. Some people say that a Socialist majority would surreptitiously use the power in this Clause to bring about nationalisation.
Why should such allegations be made? There is nothing secret about our policy. We have openly said that we would nationalise certain industries and services. Nationalisation always has been and is still included in our policy. Having obtained a majority in the House of Commons the people would expect us to carry out nationalisation, for which we would have a democratic mandate. It is Tory and Liberal Governments, Coalition and National Governments, that pass Measures without mandates and even Measures in defiance of their published policy. I need refer only to going off the Gold Standard, and to the recent legislation on conscription. Is this Amendment another example of pressure from outside interests? A letter from the Federation of British Industries has been referred to. They are strongly opposed to Clause 2. Yet it is a Government Clause in a Government Bill. It was supported by Ministers in this House, and passed by this House. I will read from the Official Report of 19th June what the right hon. Gentleman said:
The powers that a Minister of Supply wants differ in peace and in war. He must at all times, as part of the permanent machinery of State, have power to buy and sell and to make and to store. Those powers are given in clause 2.
Later on he said:
The opinion of the Government is that the earlier part of the Bill is part of the permanent fabric of the Ministry, and that the power to buy and sell and make and store are among the powers that must be permanent."—[OFFICIAL REPORT, 19th June, 1939; cols. 1919 and 1920, Vol. 348.]
Why this change? The Government had considered it, the Clause had been carefully drafted, it had been strenuously supported by the Government, and passed by the House. Now we are asked to reverse the policy and make it temporary. Is this the policy of appeasement being introduced into home legislation? Is it to appease these vested interests outside? Little leniency was shown to the Opposition Amendments on this Bill, and surely the Government are not going to be afraid of anybody at the other end of the passage, or of anybody outside the House, but are going to stick to their guns and carry the Clause in its original state.

10.3 p.m.

Mr. Burgin: Things have been said in this Debate which I think may create a wrong impression abroad, and one hon. Member said things disparaging of the equipment and plant in Woolwich Arsenal and the Royal Dockyards. I cannot allow that to go on record without a protest from one who knows. Woolwich Arsenal has a distinguished past and no doubt you could find gates put up before the Crimea, but if hon. Members knew something about the millions of money that have been put into new plant, some of the finest in the land, they would be slow to lend themselves to any cheering of criticism or disparagement of the Royal Arsenals and Dockyards. I am advised that the War Office has power to manufacture sulphuric acid as an essential part of explosives manufacture, and that both the War Office and the Air Ministry claim the right to manufacture scientific instruments of any range they require. It is no part of my task to defend those who hold different opinions and I need not, in commending this Amendment to the House, refute the suggestion that it was put forward by some unpatriotic body of people.
In my opening remarks, in endeavouring to explain how this had come about, I tried to show that a rather narrower issue is really presented by the Amendment. When the Bill was in Committee there was an Amendment on these lines on the Order Paper, but it was not selected, and consequently the House did not have this particular matter discussed. It must be obvious to everyone that a general power to manufacture is wider than the Minister of Supply would require. There must be a great deal that the Minister would not want to manufacture. I have never had any doubt that there was a great realm of industry into which I should never wish to penetrate. This is really a matter of definition. In answer to the hon. Member for East Wolverhampton (Mr. Mander), this is a Government Amendment put down because in my judgment it does not in any way interfere with or hamper the full development of a Ministry of Supply as I conceive it. The reason I say that is because under the Amendment all the powers which Government Departments have to manufacture, remain permanent. All powers without limit remain for three years, and 2½ years from now it is possible to introduce an Order-in-Council

specifying those of the undefined powers which it is desired to continue either indefinitely or for a period of time. The whole function of the Amendment is, in the undefined class of powers, to put a period of three years, with an obligation not earlier than 2½ years to define what those powers should be. I hope the House will see its way to feel that the Amendment does not, although in terms it seems to, restrict powers in point of time so as to reduce or affect efficiency.

Mr. Benn: The right hon. Gentleman spoke of the Amendment as a defining Amendment, as if he meant a spontaneous improvement that accurred to the Government. Is that the case? Did they make the Amendment proprio motu—spontaneously?

Mr. Burgin: I do not think that anything that I said would carry with it that impression at all. [Interruption.] I should not think that was accurate. The Amendment moved in another place was different in character. The date of the Royal Assent is perhaps more important than the actual wording of the Bill at the moment in the interests of the nation and, in order to secure its passage into law very quickly, I assented to the drafting of this Amendment in a form which in my judgment does not restrict essential powers and which complies with the wishes expressed in another place.

Mr. Benn: Should I be right in saying that another place, knowing that in the national interest the Bill had to be passed by a certain date, took advantage of that to force the Amendment on the Government.

Mr. Dalton: Is it or is it not a fact that on 14th June the President of the Federation of British Industries addressed to the Prime Minister a letter—it would not be in order to quote it because it has been quoted in another place—protesting against this Clause as it left this House.

Mr. Burgin: I do not wish to be thought to be quibbling, but I know nothing more than appears in the Debate in another place, to which the hon. Gentleman has access.

Question put, "That this House doth agree with the Lords in the said Amendment."

The House divided: Ayes, 208; Noes, 125.

Division No. 235.]
AYES.
[8.34 p.m.


Acland-Troyte, Lt.-Col. G. J.
Dugdale, Captain T. L.
Kellett, Major E. o.


Adams, S. V. T. (Leeds, W.)
Duncan, J. A. L.
Kerr, Colonel C. I. (Montrose)


Albery, Sir Irving
Edge, Sir W.
Kerr, Sir John Graham (Sco'sh Univs.)


Alexander, Brig.-Gen. Sir W.
Edmondson, Major Sir J.
Kimball, L.


Allen, Col. J. Sandeman (B'knhead)
Ellis, Sir G.
Lamb, Sir J, Q.


Anderson, Sir A. Garrett (C. of Ldn.)
Emrys-Evans, P. V.
Lancaster, Lieut.-Colonel C. G.


Aske, Sir R. W.
Entwistle, Sir C. F.
Leech, Sir J. W.


Assheton, R.
Errington, E.
Lees-Jones, J


Balfour, G. (Hampstead)
Erskine-Hill, A. G.
Levy, T.


Balniel, Lord
Evans, Colonel A. (Cardiff, S.)
Liddall, W. S.


Beamish, Rear-Admiral T, P. H.
Everard, Sir William Lindsay
Locker-Lampion, Comdr. o. S.


Bennett, Sir E. N.
Fildes, Sir H.
Loftus, P. C.


Blair, Sir R.
Findlay, Sir E.
Mabane, W. (Huddersfield)


Bolton, W. W.
Fleming, E. L.
MacAndrew, Colonel Sir C. G.


Bower, Comdr. R. T.
Fremantle, Sir F. E.
McCorquodale, M. S.


Braithwaite, Major A. N. (Buckrose)
Gibson, Sir C. G. (Pudsey and Otley)
McEwen, Capt. J. H. F.


Braithwaite, J. Gurney (Holderness)
Gluckstein, L. H.
Magnay, T.


Briscoe, Capt. R. G.
Gower, Sir R. V.
Maitland, Sir Adam


Brooke, H. (Lewisham, W.)
Grant-Ferris, Flight-Lieutenant R.
Making, Brigadier-General Sir Ernest


Brown, Rt. Hon. E. (Leith)
Granville, E. L.
Margesson, Capt. Rt. Hon. H. D. R.


Browne, A. C. (Belfast, W.)
Greene, W. P. C. (Worcester)
Markham, S. F.


Burgin, Rt. Hon. E. L.
Gridley, Sir A. B.
Meller, Sir R. J. (Mitcham)


Butcher, H. W.
Grimston, R. V.
Mellor, Sir J. S. P. (Tamworth)


Carvor, Major W. H.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Morgan, R. H. (Worcester, Stourbridge)


Cary, R. A.
Guinness, T. L. E. B.
Morrison, G. A. (Scottish Univ's.)


Christie, J. A.
Gunston, Capt. Sir D. W.
Morrison, Rt. Hon. W. S. (Cirencester)


Clydesdale, Marquess of
Hacking, Rt. Hon. Sir D. H.
Nall, Sir J.


Cobb, Captain E. C. (Preston)
Harbord, Sir A.
Neven-Spence, Major B. H. H.


Colfox, Major Sir W. P.
Haslam, Henry (Horncastle)
Nicolson, Hon. H. G.


Conant, Captain R. J. E.
Haslam, Sir J. (Bolton)
O'Connor, Sir Terence J.


Cook, Sir T. R. A. M. (Norfolk, N.)
Hely-Hutchinson, M. R.
Orr-Ewing, I. L.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Hepworth, J.
Pickthorn, K. W. M.


Courthope, Col. Rt. Hon. Sir G. L.
Higgs, W. F.
Pilkington, R.


Craven-Ellis, W.
Hogg, Hon. Q. McG.
Ponsonby, Col. C. E.


Crooke, Sir J. Smedley
Holdsworth, H.
Porritt, R. W.


Crookshank, Capt. Rt. Hon. H. F. C.
Holmes, J. S.
Pownall, Lt.-Col. Sir Assheton


Crossley, A. C.
Hudson, Capt. A. U. M. (Hack., N.)
Procter, Major H. A.


Crowder, J. F. E.
Hulbert, Squadron-Leader N. J.
Radford, E. A.


Davies, C. (Montgomery)
Hume, Sir G. H.
Raikes, H. V. A. M.


Denman, Hon. R. D.
Hunter, T.
Ramsden, Sir E.


Denville, Alfred
Hutchinson, G. C.
Reed, A. C. (Exeter)


Despencer-Robertson, Major J. A. F.
Jarvis, Sir J. J.
Ropner, Colonel L.


Doland, G. F.
Jones, Sir G. W. H. (S'k N'w'gt'n)
Rosbotham, Sir T.


Dorman-Smith, Col. Rt. Hon. Sir R. H,
Jones, L. (Swansea W.)
Ross Taylor, W. (Woodbridge)




Rowlands, G.
Stourton, Major Hon. J. J.
Watt, Lt.-Col. G. S. Harvie


Royds, Admiral Sir P. M. p.
Strauss, H. G. (Norwich)
Wayland, Sir W. A


Ruggles-Brise, Colonel Sir E. A.
Strickland, Captain W. F.
Webbe, Sir W. Harold


Salt, E. W.
Stuart, Hon. J. (Moray and Nairn)
Wedderburn, H. J. S.


Samuel, M. R. A.
Sutcliffe, H.
Wells, Sir Sydney


Sanderson, Sir F. B.
Talker, Sir R. I.
Wickham, Lt.-Col. E. T. R.


Schuster, Sir G. E.
Tale, Mavis C.
Williams, Sir H. G. (Croydon, S.)


Scott, Lord William
Thomas, J. P. L.
Willoughby de Eresby, Lord


Selley, H. R.
Thomson, Sir J. D. W.
Wise, A. R.


Shaw, Captain W. T. (Forfar)
Thorneycroft, G. E. P
Womersley, Sir W. J.


Shepperson, Sir E. W.
Thornton-Kemsley, C. N.
Wragg, H.


Simon, Rt. Hon. Sir J. A.
Touche, G. C.
Wright, Wing-Commander J. A. C.


Smith, Bracewell (Dulwich)
Tufnell Lieut.-Commander R. L.
York, C.


Smithers, Sir W.
Wakefield, W. W.



Somervell, Rt. Hon. Sir Donald
Wallace, Capt. Rt. Hon. Euan
TELLERS FOR THE AYES.—.


Southby, Commander Sir A. R. J.
Ward, Lieut.-Col. Sir A. L. (Hull)
Mr. Munro and Mr. Buchan 


Spears, Brigadier-General E. L.
Warrander, Sir V.
Hepburn


Stewart, J. Henderson (Fife, E.)
Waterhouse, Captain C.





NOES.


Adams, D. (Consett)
Hall, J. H. (Whitechapel)
Owen, Major G.


Adams, D. M. (Poplar, S.)
Hardie, Agnes
Paling, W.


Ammon, C. G.
Henderson, A. (Kingswinford)
Parker, J.


Banfield, J. W.
Henderson, J. (Ardwick)
Parkinson, J. A.


Barnes, A. J.
Henderson, T. (Tradeston)
Pearson, A.


Barr, J.
Hills, A. (Pontefract)
Pethick-Lawrence, Rt. Hon. F. W.


Bartlett, C. V. O.
Hollins, A.
Price, M. P.


Batey, J.
Hopkin, D.
Pritt, D. N.


Beaumont, H. (Batley)
Jagger, J.
Quibell, D. J. K.


Benn, Rt. Hon. W. W.
Jenkins, A. (Pontypool)
Richard, R. (Wrexham)


Benson, G.
Jenkins, Sir W. (Neath)
Ridley, G.


Bevan, A.
John, W.
Ritson, J.


Broad, F. A.
Jones, A. C. (Shipley)
Roberts. W. (Cumberland, N.)


Bromfield, W.
Jones, Sir H. Haydn (Merioneth)
Seely, Sir H. M.


Brown, C. (Mansfield)
Kennedy, Rt. Hon. T.
Sexton, T. M.


Buchanan, G.
Kirkwood, D.
Shinwell, E.


Cape, T.
Lawson, J. J.
Silverman, S. S.


Charleton, H. C.
Leach, W.
Simpson, F. B.


Chater, D.
Lee, F.
Smith, E. (Stoke)


Cluse, W. S.
Leonard, W.
Smith, T. (Normanton)


Collindridge, F.
Leslie, J. R.
Sorensen, R. 


Cove, W. G.
Logan, D. G.
Stephen, C.


Cripps, Hon. Sir Stafford
Lunn, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Daggar, G.
Macdonald, G. (Ince)
Summerskill, Dr. Edith


Dalton, H.
McEntee, V. La T.
Taylor, R. J. (Morpeth)


Davies, S. O. (Merthyr)
McGhee, H. G.
Thorne, W.


Dobbie, W.
McGovern, J.
Tinker, J. J.


Dunn, E. (Rother Valley)
MacLaren, A.
Tomlinson, G.


Ede, J. C.
Maclean, N.
Viant, S. P.


Edwards, A. (Middlesbrough E.)
Mainwaring, W. H.
Walkden, A. G.


Edwards, Sir C. (Bedwelty)
Mander, G. le M.
Watkins, F. C.


Edwards, N. (Caerphitly)
Marshall, F.
Watson, W. McL.


Evans, D. O. (Cardigan)
Mathers, G.
Welsh, J. C.


Evans, E. (Univ. of Wales)
Maxton, J.
White, H. Graham


Frankel, D.
Messer, F.
Whiteley, W. (Blaydon)


Gardner, B. W.
Montague, F.
Wilkinson, Ellen


George, Major G. Lloyd (Pembroke)
Moreing, A. C.
Williams, E. J. (Ogmore)


Gibson, R, (Greeneek)
Morgan, J. (York, W.R., Doncaster)
Wilson, C. H. (Attercliffe)


Green, W. H. (Deptford)
Morrison, Rt. Hon. H. (Hackney, S.)
Windsor, W. (Hull, C.)


Griffith, F. Kingsley (M'dd'sbro, W.)
Morrison, R. C. (Tottenham, N.)
Woods, G. S. (Finsbury)


Griffiths, G. A. (Hemsworth)
Nathan, Colonel H. L.
Young, Sir R. (Newton)


Griffiths, J. (Llanelly)
Naylor, T. E.



Gritten, W. G. Howard
Noel-Baker, P. J.
TELLERS FOR THE NOES.—.


Groves, T. E.
Oliver, G. H.
Mr. Anderson and Mr. Adamson

Division No. 236.]
AYES.
[10.11 p.m.


Acland-Troyte, Lt.-Col, G. J.
Greene, W. P. C. (Worcester)
Orr-Ewing, I. L.


Adams, S. V. T. (Leeds, W.)
Gridley, Sir A. B.
Peat, C. U


Albery, Sir Irving
Griffith, F. Kingsley (M'ddl'sbro, W.)
Perkins, W. R. D.


Alexander, Brig.-Gen. Sir W.
Grimston, R. V.
Pickthorn, K. W. M.


Allen, Col. J. Sandeman (B'knhead)
Gritten, W. G. Howard
Pilkington, R.


Anderson, Sir A. Garrett (C. of Ldn.)
Guest, Lieut.-Colonel H. (Drake)
Porritt, R. W.


Aske, Sir R. W.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Procter, Major H. A.


Assheton, R.
Guinness, T. L. E. B.
Radford, E. A.


Balfour, G. (Hampstead)
Gunston, Capt. Sir 0. W.
Raikes, H. V. A. M.


Balniel, Lord
Hacking, Rt. Hon. Sir D. H.
Ramsden, Sir E.


Barrie, Sir C. C.
Harbord, Sir A.
Rankin, Sir R.


Beamish, Rear-Admiral T. P. H.
Harvey, T. E. (Eng. Univ's.)
Reed, A. C. (Exeter)


Beaumont, Hon. R. E. 6. (Portsm'h)
Haslam, H. C. (Horncastle)
Remer, J, R.


Bennett, Sir E. N.
Haslam, Sir J. (Bolton)
Ropner, Colonel L.


Boothby, R. J. G.
Hely-Hutchinson, M. R.
Rosbotham, Sir T.


Bolton, W. W.
Heneage, Lieut.-Colonel A. P.
Rots Taylor, W. (Woodbridge)


Bower, Comdr. R. T.
Hepburn, P. G. T. Buchan-
Rothschild, J. A. de


Braithwaite, Major A. N. (Buckrose)
Hepworth, J.
Rowlands, G.


Braithwaite, J. Gurney (Holderness)
Higgs, W. F.
Royds, Admiral Sir P. M. R.


Briscoe, Capt. R. G.
Hogg, Hon. O. McG.
Ruggles-Brise, Colonel Sir E. A.


Brooke, H. (Lewisham, W.)
Holdsworth, H.
Salt, E. W.


Brown, Rt. Hon. E. (Leith)
Holmes, J. S.
Samuel, M. R. A.


Brown, Brig.-Gen. H. C. (Nawbury)
Hopkinson, A.
Sanderson. Sir F. B.


Browne, A, C. (Belfast, W.)
Howitt, Dr. A. B.
Schuster, Sir G. E.


Burgin, Rt. Hon. E. L.
Hudson, Capt. A. U. M. (Hack., N.)
Scott, Lord William


Butcher, H. W.
Hudson, Rt. Hon. R. S. (Southport)
Selley, Sir H.M.


Cartland, J. R. H.
Hulbert, Squadron-Leader N. J.
Selly, H. R.


Carver, Major W. H.
Hume, Sir G.H.
Shaw, Captain W.T.(Forfar)


Cary, R. A.
Hunloke, H. P.
Shepperson, Sir E. W.


Christie, J. A.
Hunter, T.
Shute, Colonel Sir J. J.


Clarke, Colonel Ft. S. (E. Grinstead)
Hutchinson, G. C.
Smithers, Sir W.


Clydesdale, Marquess of
Jarvis, Sir J. J.
Somervell, Rt. Hon. Sir Donald


Cobb, Captain E. C. (Preston)
Jones, Sir G. W. H. (S'k N'w'gt'n)
Southby, Commander Sir A. R. J.


Colfox, Major Sir W. P.
Jones, Sir H. Haydn (Merioneth)
Spears, Brigadier-General E. L.


Colman, N. C. D.
Jones, L. (Swansea W.)
Stewart, J. Henderson (Fife, E.)


Cook, Sir T. R. A. M. (Norfolk, N.)
Keeling, E. H.
Strauss, H. G. (Norwich)


Courthope, Col. Rt. Hon. Sir G. L.
Kellett, Major E. O.
Strickland, Captain W. F.


Craven-Ells, W.
Kerr, Colonel C. I. (Montrose)
Stuart, Rt. Hon. J. (Moray and Nairn)


Craft, Brig.-Gen. Sir H. Page
Kerr, Sir John Graham (Sco'sh Univs.)
Sueter, Rear-Admiral Sir M. F.


Crooke, Sir J. Smedley
Kimball, L.
Sutcliffe, H.


Crookshank, Capt. Rt. Hon. H. F. C.
Lamb, Sir J. Q.
Tasker, Sir R. I.


Crossley, A. C.
Lancaster, Lieut.-Colonel C. G.
Tate, Mavis C.


Crowder, J. F. E.
Law, R. K. (Hull, S.W.)
Taylor, Vice-Adm. E. A. (Padd., S.)


Culverwell, C. T.
Leech, Sir J. W.
Thomas, J. P. L.


Davies, C. (Montgomery)
Lees-Jones, J.
Thomson, Sir J. D. W.


Denman, Hon. R. D.
Leigh, Sir J.
Thorneycroft, G. E. P.


Denville, Alfred
Leighton, Major B. E. P.
Touche, G. C.


Doland, G. F.
Liddall, W. S.
Train, Sir J.


Dugdale, Captain T. L.
Lindsay, K. M.
Wakefield, W. W.


Duncan, J. A. L.
Locker-Lampson, Comdr. o. S.
Wallace, Capt. Rt. Hon. Euan


Eckersley, P. T.
Loftus, P. C.
Ward, Lieut.-Col. Sir A. L. (Hull)


Edge, Sir W.
Mabane, W. (Huddersfield)
Warrenderm Sir V.


Ellis, Sir G.
MacAndrew, Colonel Sir C. G.
Watt, Lt.-Col. G. S. Harvie


Elliston, Capt. G. S.
McCorquodale, M. S.
Wayland, Sir W. A.


Emrys-Evans, P. V.
McEwen, Capt. J. H. F.
Webbe, Sir W. Harold


Entwistle, Sir C. F.
Magnay, T.
Wells, Sir Sydney


Erskine-Hill, A. G.
Maitland, Sir Adam
White, H. Graham


Evans, Colonel A. (Cardiff, S.)
Makins, Brigadier-General Sir Ernest
Wickham, Lt.-Col. E. T. R.


Evans, D. O. (Cardigan)
Margesson, Capt. Rt. Hon. H. D. H.
Williams, Sir H. G. (Croydon, S.)


Evans, E. (Univ. of Wales)
Markham, S. F.
Willoughby de Eresby, Lord


Everard, Sir William Lindsay
Meller, Sir R. J. (Mitcham)
Wise, A. R.


Fildes, Sir H.
Mellor, Sir J. S. P. (Tamworth)
Womersley, Sir W. J.


Findlay, Sir E.
Moreing, A. C.
Wragg, H.


Fleming, E. L.
Morgan, R. H. (Worcester, Stourbridge)
Wright, Wing-Commander J. A. C.


Fremantle, Sir F. E.
Morrison, G. A, (Scottish Univ's.)
York, C.


Gibson, Sir C. G. (Pudsey and Otley)
Morrison, Rt. Hon. W. S. (Cirencester)
Young, A. S. L. (Partick)


Gluckstein, L. H.
Muirhead, Lt.-Col. A. J.



Glyn, Major Sir R. G. C.
Munro, P.
TELLERS FOR THE AYES.—


Goldie, N. B.
Nall, Sir J.
Captain Waterhouse and Major 


Gower, Sir R. V.
Neven-Spence, Major B. H. H.
Sir James Edmondson.


Grant-Ferris, Flight-Lieutenant R.
Nicolson, Hon. H. G.





NOES.


Adams, D. (Consett)
Bellenger, F. J.
Chater, D.


Adams, D. M. (Poplar, S.)
Bonn, Rt. Hon. W. W.
Cluse, W. S.


Adamson, W. M.
Benson, G.
Collindridge, F.


Ammon, C. G.
Broad, F. A.
Cove, W. G.


Banfield, J. W.
Bromfield, W.
Cripps, Hon. Sir Stafford


Barnes, A. J.
Brown, C. (Mansfield)
Daggar, G.


Barr, J.
Buchanan, G.
Dalton, H.


Batey, J.
Burke, W. A.
Davidson, J. J. (Maryhill)


Beaumont, H. (Batley)
Charleton, H. C
Davies, S. O. (Merthyr)







Dobbie, W.
Lawson, J. J.
Robinson, W. A. (St. Helens)


Dunn, E. (Rother Valley)
Leach, W.
Sexton. T. M.


Ede, J. C.
Lee, F.
Shinwell, E.


Edwards, A. (Middlesbrough E.)
Leslie, J. R.
Silverman, S. S.


Edwards, Sir C. (Bedwelty)
Logan, D. G.
Simpson, F. B


Edwards, N. (Caerphilly)
Lunn, W.
Smith, Ben (Rotherhithe)


Fletcher, Lt.-Comdr. R. T. H.
Macdonald, G. (Ince)
Smith, E. (Stoke)


Gallacher, W.
McEntee, V. La T.
Smith, T. (Normanton)


Gardner, B. W.
McGhee, H. G.
Sorensen, R. W.


Garro Jones, G. M.
McGovern, J.
Stephen, C.


Gibson, R. (Greerock)
MacLaren, A.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Green, W. H. (Deptford)
Maclean, N.
Stokes, R. R.


Greenwood, Rt. Hon. A.
Mainwaring, W. H.
Strauss, G. R. (Lambeth, N.)


Griffiths, G. A. (Hemsworth)
Mander, G. le M.
Summerskill, Dr. Edith


Griffiths, J. (Llanelly)
Marshall, F.
Taylor, R. J. (Morpeth)


Groves, T. E.
Mathers, G.
Tinker, J. J.


Hall, G. H. (Aberdare)
Maxton, J.
Tomlinson, G.


Hall, J. H. (Whitechapel)
Montague, F.
Viant, S. P.


Hardie, Agnes
Morrison, Rt. Hon. H. (Hackney, S.)
Walkden, A. G.


Henderson, A. (Kingswinford)
Morrison, R. C. (Tottenham, N.)
Watkins, F. C.


Henderson, J. (Ardwick)
Naylor, T. E.
Watson, W. McL.


Henderson, T. (Tradeston)
Noel-Baker, P. J.
Welsh, J. C.


Hills, A. (Pontefract)
Oliver, G. H.
Westwood, J.


Hollins, A.
Paling, W.
Wilkinson, Ellen


Hopkin, D.
Parker, J.
Williams, E. J. (Ogmore)


Jagger, J.
Parkinson, J. A.
Wilmot John


Jenkins, A. (Pontypool)
Pearson, A.
Wilson, C. H. (Attercliffe)


Jenkins, Sir W. (Neath)
Pethick-Lawrence, Rt. Hon. F. W.
Windsor, W. (Hull, C.)


John, W.
Pritt, D. N.
Woods, G. S. (Finsbury)


Johnston, Rt. Hon. T.
Quibell, D. J. K.
Young, Sir R. (Newton)


Jones, A. C. (Shipley)
Richards, R. (Wrexham)



Kennedy, Rt. Hon. T.
Ridley, G.
TELLERS FOR THE NOES.


Kirby, B. V.
Riley, B.
 Mr. Whiteley and Mr. Anderson.


Kirkwood, D.
Ritson, J.

CLAUSE 7.—(Power to require delivery of supplies and carrying out of works.)

Lords Amendment: In page 8, line 38, leave out from "arbitrators" to the end of line 40 and insert "appointed as here-after provided."

10.20 p.m.

Mr. Burgin: I beg to move, "That this House doth agree with the Lords in the said Amendment."
With the consent of the House I think it will be convenient that the whole of the remaining Lords Amendments, which deal with the one point of arbitration, should be discussed together. I am in the hands of the House, but those Amendments carry out the undertaking which I gave to this House during the passage of the Bill through Committee, and it would be convenient to take them together. [HON. MEMBERS: "Agreed."] In Committee the question arose of how the panel of arbitrators should be selected, and I gave an undertaking that the chairman and the deputy-chairman should both be persons of legal experience, that the panel should be selected by me, and that the actual arbitrator or arbitrators in a particular dispute should be selected by the chairman or deputy-chairman. The Amendments made in another place carry out that undertaking.
There is one point to which I would call attention. If there are two

arbitrators and they disagree, an umpire is appointed. We had not in our discussions contemplated an umpire, and that might have meant choosing an umpire from outside the panel; and so I have ventured in these Amendments, carrying out what I believed was the spirit of this House, to say that the arbitrators shall number either one or three so that all the members of the tribunal come from within the panel. We provide, similarly, that where there are three arbitrators the award of two shall carry. I think the House will find that these Amendments, which have been carefully drawn, do carry out to the full the undertaking which I gave to the House.

10.22 p.m.

Mr. Dalton: On the last Amendment we were endeavouring to defend the Minister against the Federation of British Industries. On this group of Amendments we were endeavouring, at an earlier stage of the Bill, to defend him against a rebellion behind him, in which though it was finally quashed it became necessary at one stage, in order to support the toppling majority of the Government, for His Majesty's Opposition to enter the Lobby in support of the Minister against the rebels. Bearing that in mind I am in agreement with the right hon. Gentleman that these Amendments do carry out: the final conclusion of the discussion on


the Report stage of the Bill, and from our point of view they have the virtue, which would have been denied to this part of the Bill if the rebellion behind him had succeeded, that they do retain in the Minister's hands, at one remove, the power to choose, by way of the chairman's or deputy-chairman's decision, which persons out of the panel of arbitrators appointed by the Minister shall arbitrate in a particular case. It is provided also that there should be either one or three persons acting as arbitrators, so as to avoid the taking of an umpire from outside the panel appointed by the Minister. Therefore, we offer no objection to these Amendments.

10.25 p.m.

Mr. E. Smith: I am opposed to this Amendment. In the first place I would remind the House that the Third Reading of the Bill was taken on a Friday morning, when all who were present desired to restrict themselves to within as narrow limits as possible in order that it should be made convenient for hon. Members to be present at a function that was taking place. I acquiesced in that because I thought it was very reasonable. The spirit of the House was such that very little was said upon that Friday. I sat here and I would have liked to speak upon one or two matters, but I did not, owing to the plea that had been made to the House. I say that, in order to show why I am speaking against this proposal now and did not do so on that Friday.
The Lords Amendment states that 'the Minister shall appoint a panel of arbitrators and
shall appoint one member of the panel to be chairman thereof and another to be deputy-chairman thereof.
My interpretation of that is that at least two members of the panel of arbitrators, and probably more than two, will be members of the legal profession. I have a number of hon. Friends who are members of the legal profession, and although I have a great respect for them I think that the position of that profession, and the responsibilities which are being put upon it in varying capacities by this House, are being carried too far. I would call the attention of the House to Subsection (2) which says:
No person shall be qualified to be chairman or deputy chairman of the said panel

unless he is or has been a barrister, member of the Faculty of Advocates or solicitor, of not less than ten years' standing.
I take a fundamental objection to those words being placed in the Bill. I know many men acting in many capacities who are as competent to deal with problems of that character as is any member of the legal profession. Some of us have had experience of courts of referees and of having to sit under chairmen who were members of the legal profession. We know many people more qualified to sit as chairmen of those courts of referees than were those members of the legal profession.
This is becoming more and more a vested interest. There are already too many members of the legal profession in this House. This is a House of Commons and is supposed to represent the common people. Generally speaking, people acting in a professional capacity have not come from the common people. I do not want to carry this point too far because it would be out of order to do so and I do not want to be misunderstood, but I believe that lawyers have a part to play in society, in many cases a noble part. I am pointing out that their profession has already sufficient influence and is filling sufficient positions in the country. We are carrying this kind of thing too far and I am opposed to the Lords Amendment.

10.30 p.m.

Mr. Tinker: I agree with my hon. Friend in objecting to the Lords Amendment. I understood from the right hon. Gentleman that he had to make some Amendment and to have it made in another place but, whatever the reasons were, I take objection to the wording of it. It casts a reflection on the ordinary man. It means that certain men who have been trained in the legal profession are given certain privileges. That is a reflection on us. We are sent here, with the ordinary training we get under the ordinary conditions of life, and when we get here we are able to hold our own with the better part of the Members of the House of Commons, even though they may be legal gentlemen. In fact, I am amazed that they occupy the standing that they claim to have, in view of the way in which they go on. They seem to be distinguished by the length of their speeches, carrying out what they do in


the courts of justice. The longer they talk, the more impression they seem to think they make. That does not carry much weight with me. I believe that the short direct speech is far better. It appears to be thought that, because of their special training, they should have special privileges over and above those enjoyed by ordinary people. I take objection to that, and I imagine that, in a House like this, there will be general agreement with what my hon. Friend has said.
It is amazing how many members of the legal profession reach this House, and, therefore, one can understand that every move forward is a kind of bolstering up of these gentlemen, who are looking out for the soft spots to make their way ahead. It is time we took a stand for the sake of our dignity. We feel that the fact that in certain circumstances certain people have managed to get that training should not give them privileges to which, as I think, they are not entitled. The Bill says that we are fit to be on the panel, but not to be the chairman or the deputy-chairman; some other man must be made greater than us, because we have not had the training that he has had. I am rather sorry that my hon. Friend the Member for Bishop Auckland (Mr. Dalton), for whose lead I have a great respect, has, without consulting us, agreed to say that we shall not oppose this Amendment. I do not like going against my Front Bench, and it has put me in rather a difficult position, but I am going to put my objection in words. I do not agree that this proposal is a right one, and I am only too sorry that it has been put forward. I voice my objection to it in the hope that my hon. Friend may retract his promise and let us have a Division upon it.

10.34 p.m.

Mr. Silverman: I hardly think anyone can have thought that, in the position I have occupied during the last 10 minutes, I have had a soft spot. I do not want to break a lance with either of my hon. Friends about the legal profession. This is not the place to do that. But I think that both my hon. Friends would recognise that the working class has thrown up its own lawyers from time to time, and has never had any reason to be ashamed of them. The right hon. Gentleman has largely himself to thank for the Debate that is now proceeding. I

would remind him of the way in which this matter arose. He was asked in Committee, from his own back benches, to do what I thought was a perfectly reasonable thing, but he obstinately refused to agree. Then he offered, as a concession, that he would appoint the arbitrators' panel and allow them to appoint their own chairman and deputy-chairman, and allow the chairman and deputy-chairman to select the arbitrators in any particular case.
I wish the right hon. Gentleman had stood by that proposal. My hon. Friends would have been perfectly satisfied and hon. Members on his own side would have been perfectly satisfied, and this discussion would not have arisen. He did not stand by his proposal because he thought he saw an opportunity of getting out of it; and the opportunity that he thought had presented itself, although it seemed open then, has closed since. Now he has to put his proposal in this form, not because he believes in it but because he cannot, without loss of face, as they say in the Far East, go back to the original proposal he made. At that time he made a speech which both of my hon. Friends would have heartily applauded. He said that one did not want arbitration by lawyers in matters of that kind; that business men would do it much better, or, at any rate, as well. I think there is a good deal of substance in what has been said. There is no reason why he should keep the appointment of the chairman and deputy-chairman in his own hands, or limit it to a particular profession for arbitrations of this kind.
I suggest that the only reason why he does not stand by his original proposal, which was far better than this and would have aroused no controversy, is that, having once withdrawn from it, he feels it impossible to go back to it—which is not a very good principle on which to recommend legislation to this House. I am not going to oppose this Amendment: I think it is a very small point; but it is a great pity that a proposal should be jockeyed about in this way: that appointments of one kind or another should be made, not on their merits but because of the chance by-play of support or lack of it on the Minister's own benches.

10.38 p.m.

Mr. E. J. Williams: I do not think the Minister can deny that when the matter


was being discussed before, he promised that the panel which would be prepared by him should itself appoint the chairman. That is how I understood it. We were talking about what happened in other spheres, and we had a long discussion on the matter. I have nothing against the legal profession as such, but there is no reason why these offices, if they are being created by the House, should be the preserve of the legal profession. It is assumed that people engaged in industry, whether on the workmen's side or the employers' side, are not competent to understand the laws of evidence, that they fail to grasp the details presented to them and to give in plain English a verdict that can be understood by all the parties concerned. It is assumed that in all these things such as were mentioned by my hon. Friend here, in courts of referees and such like bodies, men cannot be found to understand these problems and to present, after the facts have been presented to them, a verdict or decision in conformity with the facts.
I am sorry that the Minister has agreed in this connection to accept the proposition that the offices of chairman and of deputy-chairman should be filled by members of the legal profession. It would have been far better if he had selected the panel, and then allowed them to select their own chairman and vice-chairman. That is what we understood was to happen. However, this is a small point, but Members of this House ought at some time or other to indicate that they are not satisfied that in matters of this kind vested interests should be created for one profession only. Whatever is done, we ought to endeavour to avoid as far as possible creating a privileged profession, and it is for this reason that I enter my caveat against this proposal.

10.42 p.m.

Mr. Thorneycroft: I do not want to detain the House, but I feel that the Minister in this matter has behaved so fairly and with such a desire to please all sections of the House that he requires some praise from this side of the House. I spoke somewhat harshly in the Debate on an earlier occasion, but in this respect he has put forward a very fair proposition in asking the House to accept the Lords Amendment. The hon. Member for Stoke-on-Trent (Mr. E. Smith) said

that there are many men far better qualified than lawyers to decide some of these problems. As a lawyer I thoroughly agree with him, but he seems to have omitted to notice that it does not follow from this Amendment that the lawyer is going to judge the particular dispute. The only thing that the lawyer can pretend to do is to select the arbitrator, and the reason why, I understand, the Minister suggested that a lawyer should do that, is that a lawyer would have no interest in the particular dispute. He would not be concerned in the particular business and would not be a representative of the Minister, so that he could be trusted to select an impatrial arbitrator.
The hon. Member for Ogmore (Mr. E. J. Williams) complained that the original effort put forward by the Minister was that the panel should a point its own chairman. If I recollect the Debate that followed, the Opposition Front Bench pressed the Minister to appoint the chairman and the deputy-chairman. It is in his desire to meet the Opposition Front Bench in their wishes in this matter that he has changed to the present proposal. In these circumstances the Minister really has set himself out to please all sides and arrive at a fair agreement, and he deserves support in this matter.

10.44 p.m.

Sir Arnold Gridley: I desire to say only a few words at the conclusion of this Debate. The hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) referred to a revolution which took place on this side of the House a few days ago. I am sure that the whole House has enjoyed the kind of revolution which has taken place on his side of the House during the course of this Debate. What is uppermost, certainly in my own mind and probably in the mind of others, is this: The Minister has not got all he wanted, hon. Members opposite have not got all that they wanted, and we on these benches have not got what we wanted. What has happened has been an example of the spirit of compromise which is particularly British. Therefore I think we should all be satisfied.

10.46 p.m.

Sir J. Nall: I do not in the least dispute or dissent from the motives which have influenced my right hon. Friend to accept this. Amendment, but if hon. Members will


refer to the Bill they will see that the Clause to which this Amendment relates is wholly concerned with the storage of goods. The storage of goods is a matter for the transport industry, and if there is an industry in this country which is riddled with every kind of licence in every aspect of its work it is the transport industry. In trying to meet the objections which were raised in Committee I think it is most unfortunate that my right hon. Friend should have resorted to a procedure which perpetuates the very bad kink in the policy of the Ministry which he has just left—namely, to bring in the legal profession on matters where a lawyer is neither essential nor has the qualifications in connection with the relevant matters which may be dealt with.
In this particular matter, although it was desirable, as my right hon. Friend admitted, to make some change in the Bill, it seems particularly unfortunate that he should have adopted this particular proposal. This is not a matter of evidence or observing the rules of evidence, or of weighing evidence in a judicial sense. It is a matter of a common sense decision about the storage of goods, with which a man of commerce or of business is far more qualified to deal than a man with a legal training. While I do not in the least dispute that the right hon. Gentleman should have made some change, I think it is unfortunate that he has adopted the practice of the Ministry of Transport, of bringing in lawyers at every conceivable point in the transport industry, and to perpetuate it in this Bill. I think that ought to be said. I do not say that in any carping spirit. I am not a lawyer, and I have great respect for the legal profession. They are most necessary on occasions, but this is one of the occasions where they are not required and ought not to have been brought in.

Question, "That this House doth agree with the Lords in the said Amendment," put, and agreed to.

Remaining Lords Amendments agreed to.

CLAUSE 19.—(Information as to payments to employés and others.)

8.41 p.m.

Sir J. Simon: I beg to move, in page 20, line 23, after "persons," to insert "and not repaid."
The House will recall that there is in this Clause a provision as to information which has to be given by employers on request in respect of payments made on behalf of their employés. It has been called to my attention that there are cases in which the payments are subsequently

reimbursed to the company by the employés. In that sort of transaction there has to be a record of the payment. I think it is specially right to insert the words proposed.

8.43 p.m.

Mr. Pethick-Lawrence: The Amendment is sound. I had thought that the insertion of these words was not necessary, but no harm can be done by putting them in.

Amendment agreed to.

Ordered, "That further consideration of the Bill (as amended in Committee and on re-committal) be now adjourned."—[Mr. Buchan-Hepbun.]

Bill, as amended (in the Committee and on re-committal), to be further considered To-morrow.

Orders of the Day — TERRITORIAL FORCE (APPLICANT, GLASGOW).

Motion made, and Question proposed, "That this House do now adjourn."—[Captain Waterhouse.]

10.50 p.m.

Mr. Gallacher: One day last week I put a question to the Secretary of State for War about a man in Glasgow who had been a member of the International Brigade and who applied for admission to the Territorial Army. All the answers the right hon. Gentleman gave to questions appeared to be satisfactory until it was divulged that he had been a member of the International Brigade and then all other interest ceased so far as that applicant was concerned and he was refused admission to the Army. When the Secretary of State answered he answered in a very evasive fashion when he was asked whether any instructions had been given to bar members of the International Brigade from military service. He was so evasive that a further question was put, which was answered by the Financial Secretary to the War Office, and he was even more evasive, with the result that I gave notice that I would raise the matter on the Adjournment at the first opportunity.
To-night I want the representative of the War Office to face the situation that is presented to the people of this country in connection with the Army. If he is prepared to state that the Army in this country is organised, as many of us believe it is organised, for the defence of capitalism and capitalist interests, then he can make a claim that only those who are prepared to maintain that system have a right to be in the Army. If he is prepared to state publicly that the Army is not concerned with the people of the country and is not concerned with democracy, but is concerned only with maintaining the big monopolies, then he has a right to keep out members of the International Brigade, but the claim is made that the Army is democratic and that it is maintained for the defence of the people and the defence of democracy. If that is true then there can be no question of excluding anyone from the Army unless it is someone who by his attitude, by the expression of his opinions, and by his conduct, makes it clear that he is for the destruction of all that is conceived by the term "democracy."
When we talk about democracy we must take into account that which has arisen as the result of the struggles of the working classes in the past. We must take into account the trade unions, and the great Co-operative movement. We


must take into account the great political movement of the working class. There are people in this country who are opposed to trade unions and to the Co-operative societies and who would destroy them and oppose the whole conception of working-class politics and would prohibit it. Yet the door is wide open to these people. If it is a people's Army and an Army concerned with the defence of the people, and if it is an Army concerned with democracy, then the members of the International Brigade have given a heroic demonstration of their devotion to democracy and should be the very first to be welcomed in an army that claims to be concerned with defending democracy. It may be said that members of the International Brigade are somehow or other associated with the Communist party, and that many of them are members of it, and that the Communist party is not interested in democracy. Let me make this clear. There is no member that would take up any other attitude than that capitalism with democracy is far far better than capitalism without democracy; that capitalism where there is an opportunity for the trade unions to function and the Co-operative movement to grow, is much more desirable than capitalism without these things. We are for capitalism with democracy as against capitalism without it. We will fight with all, our power to maintain that democracy and try to advance it to a higher state—what is known as Soviet or proletarianism democracy. That must be understood—always for democracy.
So, members of the International Brigade, whether or not they happen to be associated with the Communist party, have given a most heroic demonstration of their devotion to democracy and to the people when the people are faced with the Fascist menace. Therefore, they should be the first to be enrolled in the Army if they want to join. The whole attitude of the Government and of the class they represent is that the Army is to defend them, their property and their privileges. They want to see any other views suppressed. There was, for instance, a case where a lad engaged in clerical work was bringing up documents and among them was one dealing with this very question, but when tried in

court, there was some story told about groups being formed and carrying on subversive activities. That is utter nonsense and rubbish. There is nothing subversive in carrying on activities and work in defence of the people and democracy. I have here a letter which I received the other day from a lad who has been called up. He is an exceptionally sensible lad, although he does not belong to the Communist party. [Interruption.] He does not belong to any political party. He refers to himself and a friend, and he writes:
We would not be against conscription if we thought that the Chamberlain Government had done all in its power to stop aggression. But has it? We say emphatically, 'No'.
That is written by a young lad of 20 years of age who is being called up. Towards the end of his letter, he writes:
So, Mr. Gallacher, we go to be made into soldiers, but believe me, if all the conscripts feel as I feel, there will not be much chance of using us to break a strike.
That young man is being called up and his whole desire, as he is being conscripted, is to train himself, and for his mates to be trained, to defend what has been won in the past. The essential thing about democracy is not the big landed estates; they were stolen before we had democracy. The essential thing about democracy is not millionaires and all the wealth that is manifest in the West End of London and the West End of other cities; that is a growth in democracy which sooner or later democracy will have to get rid of. The essential things about democracy are the trade union movement the co-operative movement, the working-class movement, free speech and the free Press. All these young lads who are being conscripted will—and quite rightly—see to it that those with whom they are associated understand, as far as possible, the character of the responsibility that should lie upon them. So it is with members of the International Brigade or members of the Communist party who want to join the Army. They will do all that they possibly can to ensure that those with whom they are associated understand what is meant by the defence of the people and the defence of democracy.

It being Eleven of the Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Orders of the Day — LONDON GOVERNMENT BILL [Lords].

Considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

The Chairman: With the permission of the Committee, I propose to adopt the course of putting various Clauses en bloc. The only Amendments are Amendments to insert those words which are underlined in the Bill and I propose to call them formally as they arise.

Clauses 1 to 83 ordered to stand part of the Bill.

CLAUSE 84.—(Payments by county council towards salary of person acting as medical officer of health or sanitary inspector.)

11.2 p.m.

Mr. Ammom: I beg to move in page 43, line 21, at the end, to add:
Provided that if the Minister certifies to the county council that a person so appointed to act as medical officer of health has failed to send to the Minister such reports and returns as are for the time being required by the regulations made under this Part of this Act respecting the duties of medical officers of health to be so sent, the said sum equal to one-half of the salary of that person shall be forfeited to the Crown, and shall be paid into the Exchequer and not to the borough council.
Hon. Members will see that these words are included in the printed copy of the Bill and underlined. It is necessary to move the Amendments in this form, because these words are privileged and could not be inserted in another place.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clauses 85 to 93 ordered to stand part of the Bill.

CLAUSE 94.—(Payment of salary, etc., due to person of unsound mind.)

Amendment made: In page 49, line 32, leave out "of it."—[Mr. Ammon.]

Clause, as amended, ordered to stand part of the Bill.

Clauses 95 to 120 ordered to stand part of the Bill.

CLAUSE 121.—(General rate fund of borough.)

Amendment made: In page 65, line 3, at the end, add:
(3) If the general rate fund is more than sufficient for the purposes to which it is

applicable, the surplus thereof may be applied under the direction of the borough council for the public benefit of the inhabitants and improvement of the borough."—[Mr. Ammon.]

Clause, as amended, ordered to stand part of the Bill.

Clauses 122 to 158 ordered to stand part of the Bill.

CLAUSE 159.—(Honorary freemen of boroughs.)

Amendment made: In page 88, line 7, at the end, add:
(3) A borough council may expend such reasonable sum as it thinks fit for the purpose of presenting an address or a casket containing an address to a person admitted to be an honorary freeman of the borough."—[Mr. Ammon.]

Clause, as amended, ordered to stand part of the Bill.

Clauses 160 to 163 ordered to stand part of the Bill.

CLAUSE 164.—(Acceptance of gifts of property.)

Amendment made: In page 90, line 15, at the end, insert:
(2) Where the purposes of the gift are purposes for which the local authority is empowered to expend money raised from a rate, it may, subject to any condition or restriction attaching to the exercise of that power, defray expenditure incurred in the exercise of the powers conferred by the last preceding Sub-section out of money so raised."—[Mr. Ammon.]

Clause, as amended, ordered to stand part of the Bill.

Clauses 165 to 188 ordered to stand part of the Bill.

CLAUSE 189.—(Power of Government Departments to direct inquiries.)

Amendment made: In page 104, line 25, after "residence," insert:
unless the necessary expenses of his attendance are paid or tendered to him."—[Mr. Ammon.]

Clause, as amended, ordered to stand part of the Bill.

Clauses 190 to 203 ordered to stand part of the Bill.

Clause 204.—(Saving for Crown rights.)

Amendments made:

In page 111, line 38, after "in," insert "Section seventeen of."

In line 40, at the end, add:
Provided that the foregoing saving for the royal prerogative shall not be held to


prejudice or affect, in relation to that or any other matter, the general application of any rule of law with respect to any estate, right, power, privilege or exemption of the Crown."—[Mr. Ammon.]

Clause, as amended, ordered to stand part of the Bill.

Clauses 205 to 208 ordered to stand part of the Bill.

NEW CLAUSE.—(Cost of returning officer in legal proceedings [1933, s. 83.])

All costs properly incurred by a returning officer in the institution of legal proceedings arising out of an election under this Act shall be deemed to form part of the expenses properly incurred by him in relation to the holding of the election.—[Mr. Ammon.]

Brought up, and read the First time.

Mr. Ammon: I beg to move, "That the Clause be read a Second time.

This is a consolidating Bill, and this brings into the Bill parts that are in the Local Government Act, 1933.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Conferences of local authorities [1933, s. 267.])

A local authority may, in such cases and subject to such conditions as may be prescribed, pay any reasonable expenses incurred by members or officers of the authority or of any committee thereof in attending a conference or meeting convened by one or more local authorities (whether local authorities for the purposes of this Act or for the purposes of the Local Government Act, 1933) or by any association of local authorities, for the purpose of discussing any matter connected with the discharge of the functions of the authority, and any reasonable expenses incurred in purchasing reports of the proceedings of any such conference or meeting as aforesaid:

Provided that nothing in this section shall affect the provisions of any other enactment for the time being in force authorising the payment of expenses incurred by members or officers of a local authority in attending a conference or meeting, or authorise a local authority to defray any expenses to which that enactment applies except in accordance with the provisions of that enactment.—[Mr. Ammon.]

Brought up, and read the First time.

Mr. Ammon: I beg to move, "That the Clause be read a Second time.

This brings into line the Act of 1933.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Provisions in case of transfer of officers.)

(1) The provisions of section one hundred and fifty of, and the Fourth Schedule to, the Local Government Act, 1933 (which relate to the transfer and compensation of officers of a local authority affected by an order made under Part VI of that Act), shall have effect in relation to any provisional order or order made in pursuance of either of the two last preceding sections as they have effect in relation to an order made under the said Part VI, and where, by virtue or in consequence of any provisional order or order made in pursuance of either of the two last preceding sections, officers of one authority who are entitled as such to the benefits of a superannuation enactment will be transferred to the service of another authority, there shall be included in the provisional order or order, as the case may be such provisions as may be necessary for the purpose of protecting the rights and interests of those officers in respect of superannuation, and such provisions may include—

(a) provisions for securing that the superannuation enactment to the benefits of which an officer was entitled immediately before his transfer shall continue to apply to him subject to such modifications and adaptations as the Minister may determine; or
(b) provisions for applying to the officer, subject to such modifications and adaptations as the Minister may determine, any superannuation enactment to the benefits of which any officers of the authority to whom the officer is transferred are entitled.

(2) In this section the expression "authority" means a local authority, the common council of the City of London, any conservators or any other public body; the expression "superannuation enactment" means an enactment, including a scheme made there under, by virtue of which persons employed by an authority become entitled to superannuation benefits on retirement; and for the purposes of this Section any reference in the relevant provisions of the Local Government Act, 1933, to a local authority shall be construed as a reference to an authority as herein defined.—[Mr. Ammon.]

Brought up, read the First and Second time, and added to the Bill.

Schedules agreed to.

Bill reported, with Amendments; as amended, considered; read the Third time, and passed, with Amendments.

The remaining Orders were read, and postponed.

Orders of the Day — TERRITORIAL FORCE APPLICANT (GLASGOW).

Question proposed, "That this House do now adjourn."—[Captain Margesson.]

11.10 p.m.

Mr. Lawson: I should like to occupy two or three minutes with this matter in order to give the right hon. Gentleman an opportunity to reply. I thought his answers last week were singularly unfortunate. Whether he meant to give the impression which was received even by some of his own friends I could not quite say, and I hope he will give the necessary explanations which will satisfy us that the War Office is not deliberately refusing the service of these men because they served in the Spanish War. It must be remembered, whatever views are held on the matter, that great numbers of these young men in the main believed in the cause for which they fought, and I should have thought they were the kind of men who were wanted for our service. I should also have thought that men who were hardened and had had experience of war were men whom the War Office would want, particularly as they have had experience in what was perhaps not a great war, but the first war in which new weapons had been used and in which those who used them are our potential enemies. It is not true to say that any great proportion of these men were Communists, if that is the objection. The great majority were not, but even if those who are Communists are men who want to serve and are men of good character, the general practice of the British Army has been to accept men regardless of their opinions as long as they are fit and are men of good character. I trust that the hon. and gallant Gentleman is going to erase from our minds the impression undoubtedly given last week that these men have been refused because they served in the Spanish war, because if that view was held anywhere in the War Office, the War Office will meet with hostility even from those who are inclined to be its friends.

11.13 p.m.

Mr. Mander: It is clear from what the Secretary of State has said in reply to questions recently, and from other sources of information, that a circular of some kind was issued to Army units throughout the country with regard to the circumstances under which they should accept

those who have fought in the International Brigade in Spain. I think it can be accepted, and I do not think the Minister will deny that such a circular was issued, and I have no doubt that he will explain and justify what has taken place. Certainly an explanation is wanted, as there is a great deal of misunderstanding and uncertainty and suspicion in the country as to the motive behind it. I should like to ask whether a similar circular was issued to Army units in regard to the conditions under which those who had fought for General Franco in Spain should be accepted, because, if not, it looks very much as if there has been a certain amount of partisan feeling.
It may be said that the Army must be very careful not to allow people to come in who hold certain political opinions. But when one remembers that the Government are trying very hard—and, I think, clumsily and without success—to make a treaty with the greatest Communist Power in the world, the suggestion that no individuals holding those opinions should serve in the British Army is ludicrous. Some other explanation there must be, and I hope the Minister will make it available to-night. I hope he will take the opportunity of stating the number of persons who have been rejected because of the recent circular and the number who are still retained. If he can put up a good case on these points, he will do a great deal to reassure the feeling of the country.

11.16 p.m.

Mr. McGovern: I have never in my life experienced a more grotesque situation than that which we have in this House at the moment. For any man claiming to be against the capitalist system to protest against men of the working class and a working-class organisation being debarred from service in a capitalist Army for a capitalist State is, to me, the complete limit of absurdity. I cannot understand exactly what the complaint is. Is there a demand here that men who are against the capitalist system should be allowed to defend that system in war? We are told that if it is for democracy, they ought to be included, but any man who is a Socialist knows that if war comes, it will not be for democracy, but it will be for the sordid capitalist interests of the ruling class throughout the world. Realising that


and understanding that situation and the position of the forces, they ought to be delighted at the prospect of working-class representatives being debarred from service in that Army. This war, if it comes, will be no more for democracy than was the last War, which the hon. Member for West Fife (Mr. Gallacher) strenuously opposed from 1914 to 1918, and if he advised men then, as I know he did, not to join the capitalist Army, why should he be protesting to-night against men not being included in the capitalist Army?
I am under no delusions regarding the object of war. This story of democracy is a new story that we are hearing in this country because of the fact that Russia now is desirous of getting into what is termed a peace front, and is prepared, we are told, to come in and defend the interests of capitalism. I say that I am not accepting responsibility for the capitalist Army, and if the hon. Gentleman on the Treasury Bench were to tell me to-night that every member of the Independent Labour Party was to be debarred from service, I would thank him; I would not protest in this House against their not being admitted. I say, on the other hand, that the policy of the Communist party, until lately at least, has been to advise men to get into the Army to undermine the loyalty of these forces and to attempt to turn them into a revolutionary army. If that is the object, then I say that the capitalist party, if they are astute, are entitled to keep people of that description out of the Army, just as in the Red Army people are shot if they are found guilty of attempting to use the Red Army for purposes of that kind. That which is done in Moscow they are doing in a modified form in this country, and they are entitled to do that. I say that it is the most amazing display of Communist hypocrisy that I have ever seen in this country. I am quite convinced that every real Socialist or Communist in this country will look upon the action of the hon. Member for West Fife in demanding that these people should be admitted to the Army as being an outrage and an anti-Socialist and anti-Communist action.

11.20 p.m.

The Parliamentary Secretary to the War Office (Sir Victor Warrender): The

hon. Member for West Fife (Mr. Gallacher) has asked me to face the situation, and I propose to do so quite frankly. This matter has arisen out of a question put concerning a circular which purported to be issued by the War Office. I am not here to deny that a circular was issued but I cannot divulge the contents of it, because it is a secret document. But when the hon. Member was questioning me the other day I did categorically say that no instructions were contained in that document to the effect that men who had served in the International Brigade were to be debarred from enlistment in the Army, and that is the case. But if I cannot disclose the contents of the document, I can satisfy the House on that by recounting what its purpose was and what were the circumstances which led to its issue.
The purpose of this circular was to give instructions to units throughout the country regarding action that should be taken if it was found that men who had served in the International Brigade were among the men under their command. Instructions were not issued to recruiting officers to refuse to accept these men, but when I tell the House the information which we have had at our disposal for some time, I think they will realise that it was incumbent upon us to take some steps to safeguard the interests not only of the Service, but of the nation too.
Let me say, in passing, that the political views of a soldier are not the concern of anybody in the War Office. He may be a Fascist, a Communist, a Liberal or a Conservative; he may have any political views he likes; but if his political views are such that they force him to resort to activities which are incompatible with enlistment in the Army, then, in the interests of the State, we cannot stand idly by. The hon. Member for West Fife asked me whether the Army existed to defend the capitalist class. He knows perfectly well that the British Army exists for the purpose of defending people in this country of all classes and all political creeds, and will do so if called upon; but to do so successfully it has to be a disciplined force, and it is only those sections of the community who seek by subversive action to undermine the discipline of the Army that come under our veto.
The circumstances which led to the issue of this circular were that we knew that


whilst the International Brigade was in Spain steps were taken to put the British members of that Brigade through a very intensive course of Communist revolutionary propaganda with the avowed intention when those men came back to this country, that they should be used for spreading revolutionary, subversive propaganda. The hon. Member for West Fife laughs, but let me refer him to "The Daily Worker." These facts were freely stated there.

Mr. Gallacher: Not subversive, but Communist propaganda.

Sir V. Warrender: As might well be expected, it was having regard to what took place while they were in Spain that we took precautionary measures to prevent the avowed object of spreading revolutionary doctrines, and doctrines subversive of discipline being carried out, in the British Army. No man can be rejected simply and solely because he was a member of the International Brigade. I quite agree that a number of these men fought gallantly in Spain and that some of them are now in the British Army, where they are making very fine soldiers indeed. It was only in the case of men whose bona fides we had reason to doubt that action has been taken.
The hon. Member for East Wolverhampton (Mr. Mander) asked me whether I could give him figures as to the number of these men who have applied for enlistment and the numbers that have been rejected. We do not know exactly how many men there are in the Territorial and Regular Armies who have been members of the International Brigade. There may be some who were members, but who are not known as such. We know that there are more than 50 in the Territorial Army and in the Regular Army who saw service with the International Brigade. They

are serving in the Army; some of them may be Communists, but that is not our affair. They can have any political views they like so long as these do not interfere with the good discipline of the Force. While we have accepted over 50, only five have been rejected or discharged. I may say that these men have not been rejected simply because they were members of the International Brigade but because they were not men of sufficiently good character, up to the standard that we require in the Army.
I appear to have given some offence the other day because I said that the Army takes steps to verify the character of recruits. In saying that I was merely stating a plain fact and not casting any slur upon the members of the International Brigade, as the hon. Member for Jarrow (Miss Wilkinson) seemed to think. Every man who comes to the recruiting office and wants to enlist has to produce a reference from someone to whom he is well known and who can vouch for his character, and to treat these men differently would have been to put them in an entirely privileged class. I hope I have said enough to-night to make the House realise—or to make unprejudiced Members of the House realise—that there has been no attempt whatsoever to discriminate against these men. All we have done is to safeguard the interests of the Army itself, and I think that, having in our possession information such as I have conveyed to the House, we should have grossly failed in our duty if we had done anything less.

Question, "That this House do now adjourn," put, and agreed to.

Adjourned accordingly at Twenty-eight Minutes after Eleven o'clock.